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Dish strikes deal to end CBS blackout, but Auto Hop is neutered in the process

Dish strikes deal to end CBS blackout, but Auto Hop is neutered in the process


Broadcasters are using contract negotiations to kill controversial commercial-skipping feature

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It looks like television broadcasters have found a way to crush Auto Hop, the automatic commercial-skipping feature built into Dish's DVRs. Broadcasters are striking deals with the satellite provider to neuter the functionality during talks to secure the carriage agreements that allow Dish to rebroadcast the networks and their affiliates.

One such deal was made late last night. Just 12 hours after CBS channels went black on Dish following months of failed contract negotiations, the two companies came to an agreement. CBS channels are now back on air for subscribers, but it seems Dish had to give up Auto Hop to get favorable terms.

12-hour blackout leads to a quick deal

According to a joint press release, Auto Hop will now be disabled on CBS for a full seven days after shows premiere in primetime. That's a valuable window for broadcasters: one of Nielsen's audience-measuring metrics, known as C7, estimates the number of viewers who watch the commercials for each show during its premiere and any DVR viewings up to seven days after. Broadcasters use those metrics to sell ads and set prices for spots.

But for Dish customers, it effectively kills Auto Hop. Before today's agreement, primetime shows watched after 1AM the following day would have the commercials automatically "erased." Now subscribers will either have to wait a week to watch the latest episode of their favorite show, or they'll go back to the old way of doing things: manually fast-forwarding through commercials on their DVR.

Broadcasters can avoid the courts and still get their way

Disney set the precedent for this type of deal earlier this year, when it too used rebroadcasting negotiations to neuter Auto Hop. Its deal with Dish disabled Auto Hop on ABC for three days following premieres. It's highly likely that the other major broadcasters will follow suit when it comes time for them to negotiate their own carriage agreements. CBS, Disney (ABC), Comcast (NBC), and Fox have all taken Dish to court over Auto Hop in the past with no real success, but the broadcasters have realized that by threatening to withhold their programming they can strong-arm Dish into disabling the feature — no courts required. Indeed, as part of these agreements, both CBS and Disney have dropped all pending litigation with Dish.

Dish is getting something in exchange, however. It's using these deals (first with Disney, and now with CBS) to lay the groundwork for an over-the-top internet TV service — something everyone from Apple, Intel, Sony, Amazon, and Google have reportedly tried to crack. All of the companies have struggled to get content providers on board, but Dish already has relationships with broadcasters and it's using renegotiations to insert over-the-top clauses into contracts. The press release is vague, but it says the new agreement includes "a path" to over-the-top distribution of Showtime. The deal with Disney earlier this year also gave Dish rights to distribute ABC networks (including ESPN) over the internet, if and when the satellite company decides to launch an internet TV service.

And what about Dish subscribers? Well, they might be losing Auto Hop, but they will be getting access to the Showtime Anytime internet streaming service for the first time. And CBS is back on air just in time for college football this Saturday afternoon. Better than nothing, right?