Dish Networks recently introduced a new DVR with a feature that will disrupt the entire television industry: it eliminates advertisements for viewers on select TV networks. The TV industry is poised for some sort of revolution, as consumers find alternative, less expensive ways to consume content through services such as Netflix, Hulu and Apple TV. Dish trails behind Direct TV and Comcast when it comes to subscribers, but this new technology will inevitably make its way to consumers beyond Dish Network. Basic cable channels, which rely on advertising as a primary source of income, will need to find new revenue streams.
It’s called the “Auto Hop” feature and Dish charges customers $10 a month, in addition to the $99 cost for the unit. When used, viewers will either see a black screen or the first frame of the commercial that gets skipped over. All that’s required is for the viewer to click on an on-screen button before watching a show to enable the feature.
This threatens billions of dollars in advertising revenue, as noted by The Wall Street Journal. It’s this premise alone that causes paid TV network subscribers to push back on any sort of change. However, this is exactly what should be viewed as an opportunity. For reference, it’s reminiscient of the music industry during Apple’s conquest with the iPod and iTunes. In the end, that transformation has benefitted everyone.
Ultimately, the Hopper gives consumers what they want, which is vital for success. We’re anxious to see how this plays out and whether or not this DVR draws more consumers to Dish. The next big rumor in the TV industry is Apple and their alleged TV. Beyond that simple notion, Apple could have a huge opportunity at their fingertips. Integrating iTunes content and iAds, while using existing data from iTunes accounts based on a user’s purchase history of music, apps, TV shows, etc., could be a significant to both TV networks, advertisers and viewers.
Watching this play out will indicate what kind of future commercial-free basic TV has and if there’s a chance that it’s here to stay.
