Dish Limits Ad Skipping Feature in Deal with ABC and Secures Rights to Launch Internet TV Service

Dish’s ad skipping feature, which lets you skip over ads while watching your favorite TV show, will not be available on its latest digital video recorders for ABC shows, the companies confirmed as part of a new long-term programming deal with ABC owner Walt Disney.

As part of the deal, Dish agreed to disable the “Auto Hop” ad-skipping feature for ABC shows until three days after the shows airs (three days is key because advertisers pay for TV audiences measured up to three days after a show is broadcast). In return, Disney will give Dish online rights to its flagship TV channels, allowing Dish to also launch an Internet-based TV service.

Major broadcasters have been embroiled in litigation with Dish over the Auto Hop alleging copyright violations and concerns over advertising revenue ever since 2012, when the company unveiled the feature in its Hopper line of DVRs.  The feature allows viewers to click an on-screen button to automatically skip all the commercials in some show carried by the four major broadcasters.  As part of the new deal, ABC agreed to drop its litigation over the Hopper.  The two companies also resolved a longrunning legal dispute between Dish and ESPN.

Dish’s deal for online streaming rights is a big win for the company, allowing it to compete with other companies like Sony, which are trying to create an online version of pay TV.  Major broadcasters have not made it easy for streaming services, however, as they fight to hang onto their old model of big TV bundles.

In addition to the Auto Hop agreement, the deal allows Dish subscribers to get access to Disney channels’ online and mobile apps such as WatchESPN. Dish also agreed to carry Fusion, a new English-language news and entertainment channel that is a joint venture between Disney and Univision Communications, along with the SEC Network, a channel to be launched later this year by ESPN that will broadcast Southeastern Conference games.

While the deal between Disney and Dish appears to be a good one for both parties, it raises questions of whether Dish and the other major broadcasters will agree to similar deals.  As TV viewers quickly adapt to streaming services like Netflix and DVRs that let them skip over commercials, the major broadcasters will have to find a way to make money off of something besides advertisements.  In the meantime, I hope the Auto-Hop feature remains, as I can not bare to watch another Viagra commercial.