Napster Moment For Dish's AutoHop?
Technology changes everything, but not exactly in the ways we expect. This happens more so with consumer entertainment technology. Dish Network’s commercial-skipping AutoHop feature may be in this category.
In the mid-1990s, Napster started as a service where one person shared music with others, evolving into what critics said was a place to get “free music.” Now, we have multiple ways of listening to “free music” of sorts – Pandora, YouTube and others.
When video tape recorders were the rage in the ‘80s, many analysts believed we would be creating our own personal TV schedules. It didn’t happen then; it was too complicated. Some 30 years later, we may be doing a version of that with DVRs.
Did we get true “free” music out of the remains of Napster? No. Many people now download music and pay for it via places like iTunes. But with lots of other streaming music apps and services, we have a lot less clarity.
Dish’s AutoHop technology, included in its new Hopper DVR, allows consumers next-day access to commercial-free prime-time programming from the four major networks. Dish says it is essentially no different than the behavior consumers are already doing: fast-forwarding.
The question is: What now? Does Dish abandon its effort? Will it end up disabling the AutoHop function? Perhaps there is a secret negotiation wish here. Dish’s press release announcing a countersuit against the networks for stifling its efforts throws in a nice grenade on the subject of retransmission revenue: “Dish’s monthly subscriber fees include significant ‘retransmission fees’ that Dish pays to the major networks. Although the broadcasters have made much of their content available for free using sites such as Hulu, they have continued to demand substantial increases in their retransmission fees.”
So Dish’s decision to go with AutoHop comes as its consumers might be seeing a rise in monthly fees. The message: We are here to give you more value.
The real effect for TV advertisers will be tiny. Dish has some 15 million subscribers out of some 115 million homes with TV. That’s 10%. Now factor in those people who want to watch shows live versus those who watch on a next-day basis. Some people say this only amounts to 20% or less. Now split this up among some 70 or more broadcast and cable ad-supported networks. Now split that up among viewers who want to see those network shows.
Trouble is, when you give viewers a taste of new technology, they make their own value judgment. At its top, Napster had some 50 million users.
Napster isn’t the scale of TV with AutoHop. But viewers might be thinking – where could this technology take me?