All Americans are in Dish’s debt. The satellite TV distributor has solved the great challenge of modern life: that of dragging your fat, greasy hand out of the bag of crisps, picking up the remote for the digital video recorder and fast-forwarding through the ads. Free at last!
Dish’s Hopper set-top box records the entire primetime line-up automatically each night and saves it for viewing later, advertisements removed. Three of the companies that produce that programming (News Corp, Comcast, and CBS) have greeted this breakthrough with a lawsuit, alleging that it amounts to an unauthorised video-on-demand service pushing stolen programming. This could undermine the “quality of primetime programming” by undercutting the advertising revenues that support it.
Advertising is crucially important to TV. PwC, the professional services firm, estimates that in 2011, 46 per cent of TV revenues came from advertising, as opposed to fees and subscriptions. At Comcast-owned NBCUniversal, the proportion is more than half, due to its strong presence in broadcast TV. Plenty of consumers use DVRs already but only about an eighth of primetime programming is watched on delay, though that is growing, according to Nielsen data. So making delayed (and adless) viewing easier is a direct threat to the content producers’ business models.