CBS CEO Leslie Moonves said the company will ultimately drop its flagship network from Dish Network unless the satellite operator discontinues its Auto Hop ad-skipping device.
CBS is in
litigation along with other networks trying to thwart the device, but even if that proves unsuccessful, CBS could simply decline to renew a carriage deal with Dish when the current contract runs
Other networks could follow, putting Dish with its 14 million customers in a tough spot. Still, Dish has given no indication that it will pull Auto Hop, which is part of a Hopper DVR service, from the market. Auto Hop allows for automatic commercial-zapping of prime-time fare.
Moonves said he doesn’t believe that Auto Hop will survive because of marketplace dynamics.
“If they want to eliminate our commercials, we will not be in business with them -- it’s pure and simple,” he told investors Wednesday. “We cannot produce an episode of a show for $3.5 million and have the people at Dish say: ‘We can pull out the commercials.’ That’s not how the ecosystem works. If they want to continue down that line, then we will just not be on Dish. That’s what will happen. We will go elsewhere, and people will take our content.”
Similarly, he said CBS will continue to fight Aereo, a device that offers CBS content on mobile devices in New York without compensating the network. CBS and other networks are also in litigation with Aereo, but that case carries a different dynamic. If the networks lose, they can’t pull programming off Aereo, since it plucks it via over-the-air distribution.
Separately, Moonves suggested CBS might consider getting into the cable business with a general entertainment network. Could CBS operate current cable assets better? “There’s no question about that,” he said.
CBS also said recently that it expects to pull in $1 billion annually via carriage fees from distributors. It recently made deals with Cablevision and AT&T and has avoided blackouts during negotiations.
“The good news is we haven’t gone dark anywhere,” he said. “It’s not that we’re not tough negotiators … people are realizing the value of our content.”