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Cable Technology Feature Article

March 05, 2014

With Disney Deal, DISH Eyes OTT Service in Exchange for Giving Up AutoHop

By Tara Seals, TMCnet Contributor

DISH Network has inked a landmark TV content carriage deal with Disney/ABC/ESPN (News - Alert) that will give the satcaster the rights to deliver some programming as part of its own over-the-top (OTT) video streaming play. However, getting there has required the satcaster to agree to suspend its commercial-skipping functionality within the Hopper Whole-Home DVR product.

DISH has renewed its agreement with the House of Mouse for carrying sports, news and entertainment content across televisions, computers, smartphones, tablets, gaming consoles and connected devices. But, the expanded deal now also grants DISH the rights to stream cleared linear and video-on-demand (VOD) content from the ABC-owned broadcast stations, ABC Family, Disney (News - Alert) Channel, ESPN and ESPN2, as part of what it calls “an Internet delivered, IP-based multichannel offering”—i.e., an OTT service.

And just to be clear, the company delineated the OTT rights from the ability of traditional DISH subscribers to sign in with their satellite credentials to access Disney programming on the Web and mobile devices via Disney’s TV Everywhere, authenticated live and VOD products, including Watch ESPN, WATCH Disney, WATCH ABC Family and WATCH ABC.

No details were given as to when the OTT service might appear in the market—it would seem that DISH wants to leave its options open. But sources did tell Bloomberg (News - Alert) that it could go for somewhere in the neighborhood of $20 to $30 per month. That’s more than double a Netflix or Hulu subscription (the latter, of course, being partially Disney-owned), which begs the question of what the differentiators will be.

“The creation of this agreement has really been about predicting the future of television with a visionary and forward-leaning partner,” said Joe Clayton, DISH CEO and president. “Not only will the exceptional Disney, ABC, ESPN entertainment portfolio continue to delight our customers today, but we have a model from which to deliver exciting new services tomorrow.”

In a clear tit-for-tat arrangement, DISH has in turn agreed to disable the AutoHop functionality for ABC content within the C3 (News - Alert) ratings window. And along with that, the agreement will result in dismissal of all pending litigation between the two companies, including disputes over the PrimeTime Anytime VOD functionality that includes AutoHop.

A viewer can watch a show with the AutoHop option commercial-free starting at 1am ET, the day after a prime-time HD program shown on ABC, CBS, FOX and NBC show has been recorded to the Hopper's PrimeTime Anytime library. Prior to that, the Hopper's 30-second 'hop forward' feature continues to work for same-day viewing. Auto Hop does not work on live broadcasts.

Unlike other VOD and DVR options in the market, including TiVO, it doesn’t just offer the ability to fast-forward through ads. In that scenario, consumers still are technically exposed to the visuals. The Auto-Hop feature, on the other hand, will simply hop over the ads, as the name suggests. And that has drawn the ire of broadcasters eager to protect their ad revenue and a slew of lawsuits—in which DISH has so far prevailed.

The Disney-DISH deal may take AutoHop out of the picture for ABC fare, but it does provide a structure for other advertising models as the market evolves, including dynamic ad insertion, advertising on mobile devices and extended advertising measurement periods, the companies said.

“We knew early on we had a responsibility with this deal to not only do what was best for our business, but to also position our industry for future growth,” said Anne Sweeney, co-chairman of Disney Media Networks and president of the Disney/ABC Television Group. “After months of hard work and out-of-the box thinking on both sides, led by Bob Iger and Charlie Ergen, this agreement, one of the most complex and comprehensive we’ve ever undertaken, achieves just that. Not only were innovative business solutions reached on complicated current issues, we also planned for the evolution of our industry.”

The agreement also covers new network carriage: DISH will make available Disney Junior, Fusion, ESPN Goal Line, ESPN Buzzer Beater, as well as Longhorn Network and the upcoming SEC (News - Alert) ESPN Network. In addition, DISH, ESPN and ESPN Deportes customers will have access to the live and video-on-demand channel ESPN3.

DISH will also launch ESPNEWS, ESPNU, Disney Channel and ABC Family in high definition. ESPN Classic will be reintroduced as a video-on-demand channel.

And finally, the companies also renewed carriage agreement for ABC’s eight owned local stations, including WABC-TV in New York City, KABC-TV in Los Angeles, WLS-TV in Chicago, WPVI-TV in Philadelphia, KGO-TV in San Francisco, WTVD-TV in Raleigh-Durham, KTRK-TV in Houston and KFSN-TV in Fresno, Calif.

Edited by Stefania Viscusi

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