Dish, Disney Reach Carriage Accord

Satellite Giant Will Carry Longhorn, SEC and Fusion Networks, Agree to Curb Ad-Skipping

After five months of negotiations, Dish Network and The Walt Disney Co. have reached a long-term carriage agreement where the satellite giant has agreed to carry several additional networks and curb its controversial ad-skipping service the Auto-Hop.

Disney and Dish have been in negotiations concerning a carriage deal since September. The two companies have been working under an extension agreement that allows Dish to carry Disney programming while talks continue.

News that the parties were close to a deal was first reported by The Wall Street Journal.

During a conference call with reporters after its fourth-quarter results on Feb. 21, Dish chairman Charlie Ergen said the two parties were steadily working toward a carriage agreement.

“The creation of this agreement has really been about predicting the future of television with a visionary and forward-leaning partner,” said Dish CEO Joseph Clayton in a statement. “Not only will the exceptional Disney, ABC, ESPN entertainment portfolio continue to delight our customers today, but we have a model from which to deliver exciting new services tomorrow.”

As part of the deal, Dish has agreed to disable its Auto-Hop ad-skipping feature for Disney Networks for three days after programs initially air. The deal also provides a structure for other advertising models as the market evolves, including dynamic ad insertion, advertising on mobile devices and extended advertising measurement periods.

“This agreement allows us to bring more innovation to the customer experience, including new marketing, packaging and delivery options,” said Dish executive vice president and chief commercial officer Dave Shull in a statement. “This paves the way for more customer choice and control over the viewing experience.”

Also as part of the agreement Dish customers will be able to access Disney’s authenticated live and video-on-demand products, including WatchESPN, WATCH Disney, WATCH ABC Family and WATCH ABC using Internet devices in the home and on the go.

Dish has also agreed to carry several additional networks – kids’ channel Disney Junior; Fusion, a news network joint venture between Disney and Spanish-language broadcaster Univision; and two ESPN sports channels: The Longhorn Network, which caries University of Texas college contests and The SEC Network, which will kick off in August and carry Southeastern Conference college games. Dish Joins AT&T U-verse as the first two SEC affiliates.

ABC, which along with other broadcasters sued Dish in 2012 over the use of the Auto-Hop ad-skipping feature, will also drop its suit.

Dropping that suit was a key component to early talks, Ergen said in November.

“We knew early on we had a responsibility with this deal to not only do what was best for our business, but to also position our industry for future growth,” said Anne Sweeney, Co-Chairman, Disney Media Networks, and President, Disney/ABC Television Group, in a statement.  “After months of hard work and out-of-the box thinking on both sides, led by Bob Iger and Charlie Ergen, this agreement, one of the most complex and comprehensive we’ve ever undertaken, achieves just that.  Not only were innovative business solutions reached on complicated current issues, we also planned for the evolution of our industry.”

Added John Skipper, President, ESPN & Co-Chairman, Disney Media Networks: “We worked with DISH to smartly address the future of the multi-screen world on several levels.  Together, we are adding value to the traditional video subscription by making great content accessible across platforms and delivering new products, including our WatchESPN authenticated networks, the highly anticipated launch of the SEC ESPN Network, expanded distribution for Longhorn Network, and a reimagined ESPN Classic video-on-demand channel.  At the same time, we are creating opportunities to add new subscribers and introducing the value of a multichannel subscription to a small subset of broadband-only consumers.”

The Auto-Hop has been a bone of contention with broadcasters during its carriage negotiations with Dish, although his appears to be the first time that the satellite TV giant has agreed to specifically delay the service. Dish has contended in the past that Auto-Hop doesn’t allow skipping until a day after the program originally airs, adding that with traditional DVRs, customers can manually skip channels. Programmers have argued that as more and more viewers time-shift programming, disabling ad-skipping is essential. And they add that the Auto-Hop makes ad-skipping easier – customers push one button to automatically skip ahead 30 seconds.