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Dish Launches New Ad Skipping Service

Dish Network said it is introducing a new feature on its
DVRs called Auto Hop that allows customers to skip all commercials for most
recorded high-definition programs shown on ABC, CBS, Fox and NBC when watched
the day after they air.

One analyst noted that the service appeared designed to cut
out the bulk of the programmers' revenues.

Dish's DVR, called the Hopper, allows viewers to record all
Big 4 network shows with one click. Dish says "Auto Hop" is an
extension of that Primetime Anytime capability, launched in March.

The Hopper automatically stores the broadcast shows for
eight days after they have aired, creating an on-demand library of approximately
100 hours of primetime TV shows, Dish says. Using patented technology, viewers
can watch the recorded shows commercial free starting at 1 a.m.

"Viewers love to skip commercials," Vivek Khemka,
VP of Dish Product Management, said in a statement. "With the Auto Hop
capability of the Hopper, watching your favorite shows commercial-free is
easier than ever before. It's a revolutionary development that no other company
offers and it's something that sets Hopper above the competition."

Auto Hop does not work on live broadcasts.

In a report, Sanford C. Bernstein & Co. analyst Craig
Moffett noted that "Auto Hop adds to an already long list of
broadcast-unfriendly features of Dish's service, including 30-second skip
buttons on their remote controls."

Moffett notes that other DVR services, including DirecTV and
TiVo, have locked this feature out of sight, while Dish boldly promotes it on a
button on the remote. Dish also offers Slingbox, which bypasses incremental
payment to affiliate fees for out-of-home viewing.

"And all this comes at a time when Dish (amid ongoing
litigation with AMC Networks) is taking a hard line on programming costs by
preemptively announcing its intention not to renew its carriage agreement with
AMC, home to the wildly popular Mad Men
(which, ironically, is about... advertising)," Moffett adds.

Moffett wonders if the networks will take legal action
against Dish. Even without legal action, he says it's likely that the
broadcasters will seek much larger retransmission payments from Dish in the
future, and notes that most of those broadcast networks are also owned by media
companies that control cable programmers as well.

"They can't be thrilled either. Indeed, although for now
Auto Hop seems to be confined to primetime broadcast, it conceivably could
spread to all programs/networks/dayparts," he said.