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Summary:

Speaking to the Wall Street Journal, Dish Network chairman Charlie Ergen defended his company’s controversial new commercial-skipping feature as a necessary innovation amid a sea change in video delivery. Oh, and he also conceded that it won’t hurt Dish when it comes to broadcast retransmission talks.

Kangaroos-and-Ergen

Charlie Ergen: When he’s not running the nation’s No. 3 pay TV service, or cleaning up at the blackjack table, he’s thinking up new ways to protect the linear TV business from hordes of digital-video invaders.

Interviewed by the Wall Street Journal, the Dish Network founder and chairman attempted to paint a new, highly controversial commercial-skipping feature in his company’s Hopper digital video recorders as a necessary innovation.

Also read: Dish defends ad-skipping DVR, pay TV peers throw it under bus

“Ultimately, broadcasters and advertisers have to change the way they do business or they run the risk of linear TV becoming obsolete,” Ergen told the paper.

But in the same interview, even the 59-year-old former pro gambler seemed to belie his own spin, tying the introduction of the new commercial-skipping feature to a motive that many have suspected all along: Dish wants leverage to drive down spiraling broadcast network retransmission fees.

“If the ad is skipped, the consumer likes it, but it’s not necessarily good for me and it’s not necessarily good for the broadcaster because I’m in the same ecosystem as him,” Ergen told the Journal while consuming a $2.98 pancake breakfast at his favorite place near Dish’s Englewood, Colo. headquarters:

“So we have to figure out how the broadcaster benefits, we benefit and the consumer continues to feel like he gets a fair deal. So maybe [the consumer] pays a little bit less for ‘retrans,’ his bill doesn’t go up by double digits every year … That’s an interesting conversation to have.”

One skeptical TV executive interviewed by the paper, when apprised that Ergen had described the commercial skipping as an innovation, said, “That’s like putting nice drapery on top of a casket. It’s 99 percent more likely that the conversation … is about retransmission fees.”

Dish ignited a fire storm last month when it introduced a new feature called Auto Hop that deletes commercials from recordings of broadcast-network shows. The matter quickly moved to federal court, with the major networks suing satellite carrier, but not before it was able to sue them first in a pre-emptive move.

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  1. mitchellsbunggee Saturday, June 9, 2012

    I don’t understand why CBS, FOX, & NBC execs don’t want us to enjoy commercial-free TV. I’m a DISH employee – AutoHop is great because you can easily watch commercial-free TV. Public Knowledge, a consumer advocacy group, is taking a stand for consumers by creating a petition that tells CBS, FOX, & NBC media to keep their hands out of your living room & DVR. Sign their petition to keep control of how you watch TV http://bit.ly/KFdn1Q

    1. Seriously? You “don’t understand”? That’s nonsense. Of course you understand. All of those companies derive the greater part of their gross revenue from advertising. The amount of $ per ad they get is directly correlated to the number of measured views they can report on each of these ads. If millions of Dish subscribers aren’t watching those ads, then their revenues drop.

      Dish may or may not be right in their legal position on the AutoHop device, but let’s not be children and pretend we “don’t understand”.

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