AutoHop: A DISH that’s hard for networks to swallow

On May 10^th, 2012 Dish network (hereafter “DISH”) announced that it would be adding a new feature named “AutoHop” to their digital video recorder (the Hopper).  The feature would allow viewers to automatically skip over advertisements in the shows that they record.  Large TV networks such as Fox, CBS and NBC have called the feature illegal, and are suing DISH on the basis of copyright infringement.  DISH has responded to these accusations by also filling with the court for a ruling that the feature is legal.

From the perspective of the networks, this service could potentially destroy “the fundamental underpinnings of the broadcast television ecosystem” said Fox representative Scott Goggin.  Their main concern is that, from the perspective of an ad company, people who own DISH DVRs won’t be watching any ads in their recorded shows with this feature.  As a result, ad companies might not be so willing to pay for ad space during the broadcast of these shows.  Since selling ad space is a network’s main source of revenue, they stand to lose a lot of money if advertisers are concerned about the AutoHop feature.

That reasoning however, might be somewhat flawed.  While it is true that the AutoHop feature allows a viewer to skip ads on recorded programs, it does not affect television viewed in primetime.  That same point is one made by Dave Shull (senior vice president of programming at DISH) when he said, “AutoHop needs to be put in perspective: the majority of our viewers watch their primetime shows live or during the same evening — the time that is most valuable to advertisers. We chose to incorporate AutoHop as a next day feature and only if enabled by the consumer”.  Since the new feature only applies to recorded programs, it isn’t fundamentally different from viewers choosing to fast-forward through advertisements manually.  “Customers have been skipping commercials since the birth of the remote control” says Shull and he asserts that this new feature will just make it easier for viewers to do what they have been doing for ages.

With both parties looking for a ruling as to the legality of this feature, we should examine the potential success of their claims.  First off, the networks will need to prove that commercials are a part of the compilation work that is their broadcast.  A compilation work is defined in American copyright law as “a work formed by the collection and assembling of pre-existing materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship”.  In this case, the pre-existing materials would be each separate advertisement and the show itself.  Networks would have to argue that the arrangement of the program and the ads is sufficiently original to be considered a separate work apart from the individual materials. Secondly, the networks have to prove that the rights they sold to DISH were to retransmit and make copies ONLY of the compilation work that is their broadcast, and not of the show without commercials.  This argument’s success will depend on the wording of the network’s contract with DISH.  Thirdly, the networks would have to prove that the AutoHop feature violates one of the rights stated in section 106 of U.S. copyright law.

Fortunately for DISH, even if the networks manage to succeed in establishing the first two elements, the third is an issue, because the AutoHop feature doesn’t create a separate copy of the broadcast.  All the feature does is automatically skip parts of the fully copied broadcast; a copy which DISH has been licensed to create. The networks will be left with trying to claim that a viewer watching an AutoHopped recording somehow falls within the category of a public performance.  This is an argument which will likely fail.

It may not come to a decision however if the networks choose to approach the problem in a different way.  Billionaire Mark Cuban suggests that the networks should propose a settlement where DISH can pay them a premium and air shows without commercials.  This way, the networks might recuperate any lost advertising revenue and the viewers can get TV shows without commercials.  Todd Mitchell, a media analyst suggests that DISH might be willing to disable the feature if the networks are willing to reduce the cost of DISH airing their shows.  It seems like negotiation may be a better option for these networks, because the legal ruling likely won’t be in their favour. 

Adam Stevenson is a JD candidate at Western University