ABC will accept AutoHop after the C3 period ... apparently the value of those commercials has lessened after C3 - so it is a compromise. That is, until DISH and ABC work out a way to insert current ads in replayed ABC content. (That thought is also buried in the press release.)
I still don't see where one is forced to watch ABC/ESPN/Disney commercials on the DVR. The skip buttons will still work and AutoHop will work on ABC after C3.
Perhaps in my initial exasperation with the deal, I didn't express well and concisely my view of the long term, big picture meaning of this agreement. So let me begin again, first with the history.
It all began in the first half of the 20th Century with the 100% advertising-supported local broadcast channel model. Those channels were awarded licenses from the FCC to broadcast a signal over the public airwaves which viewers, after acquiring the right equipment, could view for free.
But in some areas, folks just couldn't get a decent signal. From Wikipedia:
The abbreviation CATV is often used for cable television. It originally stood for Community Access Television or Community Antenna Television, from cable television's origins in 1948: in areas where over-the-air reception was limited by distance from transmitters or mountainous terrain, large "community antennas" were constructed, and cable was run from them to individual homes.
So for about 25 years, some people paid the cable system the cost of obtaining the broadcast channels signals which much of the audience paid only for equipment like an antenna and a TV.
Then came the HBO "premium" channel model. This was a channel on cable systems only. The model was to charge a "high" subscriber fee in lieu of advertising to cover the cost of content. Per Wikipedia:
HBO is the oldest and longest continuously operating pay television service (basic or premium) in the United States, having been in operation since November 8, 1972.
Four years later Ted Turner added what we now know as the basic cable channel model - the channel we now know as TBS. That model theoretically and in practice included a very low subscriber fee most of which presumably went to the cost of cable delivery and advertising most of which presumably went to cover the cost of content. Of course, both revenue sources cumulatively were to help generate profits for the channel's owner and the cable company's owner.
Then, in 1992 the broadcast folks lobbied Congress to adopt the Cable Television Protection and Competition Act which established the "must carry" rule which seemed at worst innocuous and at best beneficial. It basically assured that all the competitors, satellite and cable, would carry all the local channels in each DMA. That set an expectation that ultimately resulted in retransmission fee disputes.
Since 2000, while chanting the mantra "greed is good" we've watched two international media conglomerates destroy this three-legged stool economic model - (1) ad supported FCC-licensed broadcast channels, (2) high fee subscription supported premium cable channels, and (3) low fee subscription plus advertising supported basic cable channels.
Before dealing with the two conglomerates let me first create a basis for comparison. HBO has not been given any government licenses. Cable/satellite customers do not have to pay for HBO in order to watch TV. I estimate that by around 2020, those who subscribe to HBO will pay to HBO about $5 billion a year for content they desire to watch and pay for.
Now on to the "greed is good" international conglomerates.
There's Rupert Murdoch's News Corp which noticed that the broadcast Fox Network wasn't making a satisfying amount of money from advertising. Welcome Americans to the high broadcast network "retransmission fee" which is basically a tax imposed on most Americans. You see, you and I cannot opt to watch HBO and Showtime without paying the tax to News Corp. And that tax will be relatively high by 2020 - generating for News Corp from the Fox Network and the 28 owned-and-operated local Fox and MyNetworkTV channels $4± billion annually, in addition to advertising which up to that point was to support the FCC license holders.
Then in the "greed is good" group there is The Walt Disney Company which owns not only the Disney cable channel group, but also the ESPN cable channel group and the ABC broadcast network plus 8 owned local ABC channels.
Dispensing with the broadcast-network-and-channel tax first, by around 2020 ABC will generate for The Walt Disney Company about $3± billion which we American capitalist ideologues will pay if we want to watch HBO and Showtime.
And here's the rub about the Dish-ABC deal. When we started paying the "free to air" FCC-licensed-taxpayer-subsidized broadcast channels as much as, or more than, we pay for cable channels, Charlie came up Autohop so it would be easy to not have to watch commercials. That seemed like a fair trade from the viewer standpoint. They get to keep their government licenses, we pay retransmission fees, and we don't even know there are commercials making them more like HBO.
The fact is Charlie just gave that viewer benefit away forever for all broadcast channels and for all cable channels.
But that wasn't enough taxation for the Disney Folks. My estimate is that by 2020 the ESPN content tax in the typical lowest package will generate $9± billion which we will pay if we want to watch HBO and Showtime. Then there's the Disney Channel cable channel content tax which I estimate that by 2020 will generate $3± billion which we will pay if we want to watch HBO and Showtime. And we will see ads (nobody is fast enough with the FF or skip button to not see that there are ads).
Much is being made of the streaming deal, a really successful spin. This sounds really cool to the naive young generation. Let's go to the LA Times "Company Town" media conglomerate news page for a reality check that doesn't depend on my opinion:
As part of the deal, Dish customers also will be able to access Disney-branded video-on-demand products, including the Watch ESPN and Watch ABC applications, in their homes and on mobile devices. Those offerings do not allow viewers to fast-forward through commercials, part of the industry's strategy of attempting to preserve the lucrative economics of television.
...But if and when it arrives, Dish's Internet service might look a lot like what Dish offers now — a set package of channels — and not the "a la carte" service that some consumer activists have been demanding from the industry.
"This is not a la carte in any way, shape or form," Bernstein & Co. media analyst Todd Juenger wrote in a report.
"No one is going to agree to provide their channels separately for an unbundled product," he said.
In other words, the agreement basically concedes that viewers will pay a lot - fees that could rival premium services like HBO - plus they'll have to put up with commercials. The agreement institutionalizes a new combined retransmission fee/ad viewing model with the "must-carry" taxation system fully incorporated.
And don't for one moment think this is not going to set the standard across the board. From that same article:
The Disney-Dish deal is expected to serve as a template for other entertainment companies haggling over new carriage agreements with pay-TV distributors.
At an investor conference Tuesday, CBS Chief Executive Leslie Moonves praised the Disney-Dish accord.
"This is a great preliminary step for everybody," Moonves said, adding that CBS is scheduled to negotiate a new distribution deal with Dish by the end of this year. "It's going to be an interesting conversation."
Let's not kid ourselves. In the long run, this deal is a win for international media conglomerates, not for Dish, and it is a significant loss for viewers, particularly Dish customers who lose the effectiveness of the Autohop feature.
The multi-channel record feature PrimeTime AnyTime remains intact.
What the Hopper box offers is the ability to record three shows during about 21 hours of the day. Yes during the three prime time hours the you have the capability to record six shows, but this is a reality only if you are interested in everything on ABC, NBC, CBS, and Fox. That may or may not be competitive with a DVR that is capable of simultaneously recording any five programs at once at any time like the DirecTV Genie or four programs at once at any time plus an incredible on-demand streaming selection which does not get "charged" to your internet use like the Xfinity X1 Platform .
IMHO this deal is a major loss for Dish customers and for all viewers who would prefer (1) not to have to pay high monthly fees for channels they never watch and (2) not to pay high monthly fees for channels where they must deal with commercials. And by the way, it's a blow to Echostar's investment in Autohop that apparently nobody else recognizes.
Edited by phrelin, 05 March 2014 - 02:22 PM.