Dish CEO Clayton Responds to Criticism of Ad-Skipping DVR

Dish Network Corp. (DISH) says it has “respect” for broadcast networks after executives at Comcast Corp. (CMCSA)’s NBC and News Corp. (NWSA)’s Fox questioned the company’s motive for letting subscribers automatically skip ads.

Dish, the second-largest U.S. satellite-TV service, has “respect for the networks and for the advertising model,” Chief Executive Officer Joseph Clayton said yesterday in an e- mailed statement.

Clayton was responding to comments about Dish’s new Auto Hop feature, which automatically skips ads in programs subscribers have recorded for later viewing. NBC Broadcasting Chairman Ted Harbert, in remarks to advertisers on May 14 at Radio City Music Hall, said Auto Hop is “an insult to our joint programming.”

Last week, Englewood, Colorado-based Dish announced the new feature for its digital-video recorders. Auto Hop bypasses ads from recorded shows on NBC, Fox, ABC and CBS, the four largest broadcast networks.

Dish knew the feature might displease broadcasters, which is why Auto Hop only works for day-after viewing, said Vivek Khemka, president of product management. The pushback isn’t Dish’s primary concern, he said.

“I really wasn’t thinking about what the network executives were going to say,” Khemka said in an interview. “I was thinking about getting a good response from consumers, and what we’ve seen so far is a pretty overwhelmingly positive response from customers, from comments online and on Facebook.”

What Consumers Want

Dish said the technology gives consumers what they want -- a way to skip commercials -- and isn’t an attack on the current pay-TV ecosystem.

“We are spending more on national advertising in 2012 than we ever have,” said Clayton. “In recent years, Dish has agreed to pay significant rate increases for broadcast content. Dish values its relationships with both local and national broadcasters. But, answering the consumer demand for choice and control is our primary mission.”

Fox Entertainment Chairman Peter Rice said on May 14 Dish’s decision to give customers the ability to bypass ads without fast-forwarding was “surprising” given “they’re going to do that to their largest content providers.”

Dish fell 1.4 percent to $30.17 yesterday in New York. The stock has gained 5.9 percent this year.

To contact the reporter on this story: Alex Sherman in New York at asherman6@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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