by Jeff Reeves | May 23, 2012 9:53 am
Walt Disney Co. (NYSE:DIS) doesn’t like the idea of viewers skipping commercials on its television stations including ABC and ESPN. And Dancing with the Stars fans may not approve of the behavior, either, if push comes to shove.
Disney’s Chairman and Chief Executive Robert Iger spoke with FOX Business Network this week about a new technology from Dish Network (NASDAQ:DISH) called Auto Hop, which has a commercial-skipping feature. The short of it was that if viewers don’t want to watch commercials, then Disney won’t be able to bankroll some of its biggest shows.
“We’re fortunate that in today’s world we can take programming and put it on new platforms and generate new forms of revenue, but when it comes to advertising, certainly for our television network, ABC, and for our local stations, it still represents the bulk of the revenue that they bring in,” Iger said. “So supporting a great program like Dancing With The Stars can only be done if you’ve got advertising. It’s critical that we not only make space for advertisers and sell it appropriately, but that audiences see those ads to support this great program.”
Watch a clip below. And keep that in mind next time you skip over the commercials with your DVR.
In defense of Dish Network, you have to admire the company’s willingness to connect with what consumers actually want even if it makes some partners cranky. The reality is that many folks want to skip commercials and are already doing it with the available means, so DISH is just filling in the blanks. And bigger picture, DISH is in a tough spot trying to figure out how to compete with the emergence of streaming and mobile devices on one side, and conventional cable providers like Comcast (NASDAQ:CMCSA) and Time Warner (NYSE:TWX) on the other. An ambitious 10-year plan from DISH includes a vision of becoming a one-stop shop for internet, video and voice and taking the next step in emerging technologies is the only way to get there.
However, making programmers like Disney cranky — or a host of other networks like NBC, which also weighed in against Auto Hop recently — may not be beneficial in the long run. Quality programming doesn’t come cheap and everyone is struggling to figure out how to generate money in this new media world to support quality programming.
Some shows are wildly popular because of their big budgets and production values, but the most popular shows are the ones that viewers are sometimes the least willing to suffer ads on. It’s quite the game of chicken.
Only time will tell who will blink first: The programmers like Disney, the providers like DISH or the consumers who have to endure the ads. But it’s clear that broadcasters like Disney, ABC and others aren’t going to let their ads disappear without a fight.
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at editor@investorplace??.com or follow him on Twitter via @JeffReevesIP. As of this writing, Jeff Reeves did not own a position in any of the aforementioned securities.
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