DISH and Gannett settle dispute, but AutoHop questions remain

Michelle Clancy | 09-10-2012

DISH and Gannett Co. extended their retransmission negotiations past the blackout deadline in Sunday night and have managed to come to a deal over renewing content carriage for Gannett's 22 local TV affiliate stations—terms undisclosed. But that was not before a war of words brought AutoHop into the mix, DISH's commercial-skipping feature within its DVR that it is facing litigation over from broadcasters.

"Gannett's demands translate into more than a 300 percent rate increase, which would likely result in higher monthly fees for consumers," the satellite operator said in a statement. "Additionally, Gannett has demanded that DISH eliminate customer-enabled commercial-skipping technology found on its Hopper Whole-Home DVRs or pay a massive penalty."

DISH warmed well to its theme. "Viewers have been skipping commercials in the privacy of their own homes for generations," said Dave Shull, DISH senior vice president of programming, in a statement. "The TV industry should be ... delivering innovation and viewer control. Gannett is stifling innovation and crushing customer choice and control. That's insulting to our subscribers and we won't stand for it."

But a Gannett source with "direct knowledge of the negotiations" told SNL Kagan that Auto Hop was not an issue in the negotiations. "It's not about the Auto Hop," the source said.

TV station owner Hoak Media recently had a similar retrans dispute with DISH, during which the satellite broadcaster once again referred to AutoHop as a sticking point. Rich Adams, executive vice president and COO of Hoak Media, told SNL Kagan at the time that "there's been really no discussion about this technology in our negotiations."

He suggested the AutoHop spotlight may be a media stunt. "The customers of DISH who are our viewers don't know about it, no one's ever seen it," he told the research firm. "And so I think they've done a pretty smart marketing move in trying to shine a light on it by saying we have a problem with it."

But given the lawsuits that DISH faces from CBS, ABC, NBC and FOX, "Broadcasters are absolutely making an issue of it," said SNL Kagan analyst Robin Flynn. "Advertising is how they pay for programming, and the fact that DISH is providing customers with the means to skip commercials is a huge issue for TV station owners and networks."

AutoHop lets customers automatically skip commercials in programming that has been pre-recorded on the DISH DVR—a feature that has sparked outrage at the national networks. Only time will tell AutoHop's fate—there could be movement in the broadcaster's lawsuit against the feature as early as this week.