Networks Postpone Settlement Talks With Dish, Customer Data Crucial To Future Ones

by David Goetzl, Jan 30, 2013, 5:04 PM

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After all the barbs tossed back and forth, the combatants actually were scheduled to meet this week and try to work through their differences. Several hours in a conference room and there could have been at least a path to peace.

Didn’t happen. Not surprisingly, the battling will continue.

NBC, CBS and ABC were to hold settlement talks with Dish Network regarding their litigation over the Hopper DVR. But the networks wanted to cancel and a meeting was postponed until a ruling on a preliminary injunction.

The three networks (and Fox) are looking to shut down the Hopper’s capability to automatically skip commercials (the AutoHop), among other functions.

Still, any tete-a-tete likely wouldn’t have resulted in much. It’s too early.

The potential for a truce might lie in Dish’s abilities to market the Hopper and AutoHop. If it succeeds, a settlement gets much tougher. Failure, however, might have Dish coming to the table looking for a deal.

Court papers suggest Dish is spending big time on its campaign plugging the AutoHop (and the PrimeTime Anytime feature that makes it possible). Dish has been rather brazen with messaging that includes the tag: “Skip Commercials Jump For Joy.” That’s like threatening a network with taking away a child.

If Dish determines it's getting loads of new customers because of the Hopper, and lots of current customers are willing to pay for it, the prospect of reaching any settlement with networks to curtail the AutoHop goes way down. There have been suggestions that Dish is simply using the AutoHop to give it leverage in negotiations with networks over carriage fees and it might be willing to eliminate it for a cut rate.

But if AutoHop lovers face a message effectively saying “the Hopper DVR continues to offer amazing features, just not killer commercial zapping anymore" or Dish just cuts it out with no warning, backlash could follow.

Dish says that freely in a recent court filing, citing “severe, immediate hardship in the form of damaged customer relations, lost goodwill and other costs” that could come with having to shutter AutoHop. Direct results, Dish says, could be customers seeking “refunds” and cancelling service altogether.

How many Dish customers are using AutoHop now – it’s been on the market since mid-2012 – isn’t clear. But in a September hearing in federal court, a Dish attorney indicated it’s fewer than 1 million out of Dish's 14 million subscribers. And in its recent filing Dish says a “relatively small number” of its customers have the Hopper at all and an “even smaller number” have enabled PrimeTime Anytime, the AutoHop propeller.

At the same hearing, a Fox attorney said Dish has indicated it expects 2 million customers to have PrimeTime Anytime/AutoHop enabled this year. That would be 14% of Dish’s current subscriber base. Still, having the features doesn’t mean they are being used.

Dish has access to that data and will surely make long-term projections on customer adoption. Its calculations will no doubt impact how its lawyers talk to those for the Big Four networks outside court as they continue to swing away in it.

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