Some of you may have been already following the recent spat of back-and-forth lawsuits between DISH Networks and a group of broadcasters. In brief, at January's CES (Consumer Electronics Show), DISH introduced a PVR (personal video recorder, also sometimes called a DVR aka digitial video recorder) called Hopper, which simultaneously recorded up to six programs and also supported in-home streaming to companion playback clients called Joeys.
More recently, in mid-May, DISH unveiled yet another Hopper feature, AutoHop, which uses server-side guidance to selectively skip over commercials while recording. Technology old-timers (like me) may be having flashbacks to ReplayTV (I nostalgically still have a unit sitting in my garage), especially when they hear that DISH is being sued by CBS, Fox and NBC, after having preemptively sued all four major broadcasters in seeking a "declaratory judgment" that AutoHop doesn’t infringe copyright.
Subsequent to the initial legal flurry, none of which is yet resolved, DISH's chairman Charlie Egan granted a rare interview to the Wall Street Journal, in which he opined that AutoHop is a "competitively necessary" response to the burgeoning availability and popularity of inexpensive Internet video, which threatens the pay-TV ecosystem. Here are more relevant quotes from the WSJ interview, the entirety of which I commend to your attention:
With the new service, Mr. Ergen aims to force the networks to develop "more meaningful" ads, using, for example, demographic targeting of viewers. "Ultimately, broadcasters and advertisers have to change the way they do business or they run the risk of linear TV becoming obsolete," he said. "I think the conversation is going to go a lot faster because now there is a risk of inaction as opposed to no risk of inaction."
Mr. Ergen, 59 years old, says four of his five children have stopped paying for a TV subscription, and the fifth is living home. Motioning to his daughter sitting next to him in the restaurant, he says she and her friends "come home and bring out their tablets" and surf online "until they find something free that they want to watch."
He also complains the broadcast networks are making many of their programs available free online on various sites, including their own and Hulu, which is controlled by several big network owners (including News Corp., which owns Fox and The Wall Street Journal). What's more, he notes, the shows carry fewer ads online than when they were originally broadcast, which makes him think the broadcasters' complaints about Auto Hop are "disingenuous."
Mr. Ergen says networks—and advertisers—need to develop more targeted commercials "that you're not going to want to hop over," and he says he has "half a dozen creative ideas" about how to do that.
AutoHop admittedly makes it especially easy for a viewer to bypass commercials, by not presenting them in the first place. But it's in a sense only an extrapolation of the "30 second advance" buttons that have long existed on remote controls. The broadcasters are certainly already aware that viewers are skipping past commercials, but their responses to date have been reactive versus proactive; variable-length commercials, for example, coupled with brief program epilogues that are separated by the main program by a commercial or few and are easy to miss if you try to jump past the commercials to get to them. You may have also noticed a dramatic increase in recent times of so-called "product placements" within programs, in an attempt to compensate for lost commercial revenue.
But ironically, within hours of my perusal of the Wall Street Journal interview with Ergen, I came across at least two examples (of many I've seen over the past 11 months) of attempts to implement the "commercials that you're not going to want to hop over" vision that he espoused, both by making them more relevant to a particular viewer and by making them more interactive and otherwise entertaining. First off is Flingo, which has developed a service that uses video analytics technology to figure out what programming a given household (more specifically, a given set-top box) is accessing. A content provider could tailor the commercials send to that particular destination in inferring interests from content accessed; sports-themed advertising for a set-top box that's frequently tuned to ESPN, for example, or cooking-flavored (pun intended) promotions for Food Network fans.
Long-time readers may remember VideoSurf, which I first mentioned in early October of last year and which Microsoft subsequently acquired. I suspect that Microsoft has similar aspirations for VideoSurf's analytics technology, as the Xbox 360 and associated Xbox LIVE service increasingly become a content delivery competitor to DISH, DirecTV, Comcast, and other legacy providers. And speaking of Microsoft, the company has begun using the popular Kinect 3-D camera peripheral to deliver interactive NUads, which viewers can control via both hand gestures and voice commands. As summarized by the Wall Street Journal's AllThingsD:
Advertisers will be able to ask viewers to answer multiple-choice questions by speaking “yes” or “no way” out loud, or by gesturing. The results will appear in real time on the screen, so subscribers can see how others are voting. Perhaps the novelty of the experience will get users to watch the ads instead of trying to find a way to fast-forward through them.
