19 Gannett Stations Could Go Dark on Dish SundayFees, Ad Skipping Main Sticking Points in Negotiations 10/05/2012 8:44 AM Eastern
In a bit of a twist to the usual retransmission-consent battle rhetoric, Dish Network and Gannett Broadcasting appear to be sharpening their knives over an issue other than money: ad skipping.
Dish fired the first salvo on Friday, claiming that Gannett has threatened to pull its 19 broadcast stations from Dish subscribers on Oct. 7 if the satellite giant it does not succumb to its demands.
Among the cities affected are Atlanta; Washington, D.C.; Denver; Minneapolis; Cleveland; Phoenix; Sacramento, Calif.; St. Louis; Little Rock, Ark.; Tampa and Jacksonville, Fla.; Macon, Ga.; Bangor and Portland, Maine; Grand Rapids, Mich.; Buffalo, N.Y.; Greensboro, N.C.; Columbia, S.C.; and Knoxville, Tenn. The stations are affiliates of networks NBC, CBS, ABC and MyNetwork TV.
Cash is at the top of the list of those demands – a 300% increase in retrans fees, according to Dish – but the satellite giant claims the broadcaster also is demanding that it disable its controversial ad-skipping technology, the Auto Hop, or face severe financial penalties.
Just what those penalties are neither side is saying.
In a statement, Dish said that it has offered to pay as much as a 200% increase in retrans fees to Gannett, but was rebuffed. It apparently is drawing the line at disabling Auto Hop, however.
“Dish has delivered innovation to improve upon technology that has been in the viewers’ hands for decades. Viewers have been skipping commercials in the privacy of their own homes for generations,” said Dish senior vice president of programming Dave Shull in a statement. “The TV industry should be doing just that, delivering innovation and viewer control. Gannett is stifling innovation and crushing customer choice and control. That’s insulting to our subscribers and we won’t stand for it.”
According to sources close to the negotiations, Gannett is not requiring that Dish disable the Auto Hop, but it does want to be fairly compensated for any lost revenue resulting from Dish subscribers skipping through ads.
“The Hopper has economic implications,” said one executive familiar with the talks. “Certainly it is part of the business model consideration of the deal.”
The issue of ad skipping has chafed at programmers since the advent of the Digital Video Recorder -- DVR pioneer TiVo flirted with a 30-second commercial skipping button on its remotes more than a decade ago and ReplayTV actually introduced an ad-skipping feature but dropped it in 2003 after filing for bankruptcy. And DVR users – which number about half of TV viewers today – have always had the ability to skip ads by using the fast-forward button on their devices. The difference with Auto Hop is that it makes ad skipping easier – it allows viewers to skip all commercials for most recorded programs when viewed a day after originally airing – and more and more households are watching programming for the first time on their DVRs.
Shortly after introducing Auto Hop in May, Dish was sued by several broadcasters over the feature, which they claimed violates their copyrights. Those cases are still pending.
Gannett officials were reportedly in Denver Friday to negotiate with Dish and are still hopeful they can avoid a blackout on Oct. 7.
“We remain committed to continuing to negotiate with Dish right up to that deadline and believe an agreement is possible, as we are seeking nothing more than the same market-based terms that have allowed us to reach deals with TV providers across the country,” Gannett said in a statement. “Gannett has never had a service disruption with a major TV provider and we hope we do not face that situation with Dish. However, we have a responsibility to our viewers, so today we are beginning a public information campaign to make them aware of the situation and urge them to make their voices heard.”