Broadcasters are claiming in federal lawsuits Thursday that Dish Network’s DVR service, which allows the automatic skipping of commercials, breaches copyright law and retransmission agreements.
The suits by Fox, CBS and NBC are the broadcasters’ latest legal salvos against technological innovations, as those advances bring into question whether broadcasters’ longstanding business model can survive the digital age.
The Dish Network litigation concerns the March introduction of what the satellite company calls PrimeTime Anytime, which allows customers to record and store about a week’s worth of prime-time broadcast television. And two weeks ago, the Colorado company enabled playback of those archives without users seeing commercials.
The networks are labeling it a “bootleg” service that produces unauthorized copies of their shows and say it breaches signed licensing deals. And the consequences are dire, they warn. If the courts don’t block the service, it “will ultimately destroy the advertising-supported ecosystem that provides consumers with the choice to enjoy free over-the-air, varied, high-quality primetime broadcast programming,” the broadcasters told the court.
In the early 1980s, the Supreme Court ruled Americans have the fair use right to time-shift lawfully obtained content for later viewing. But that was using primitive technology like the VCR and Betamax, with limited recording capabilities. The Dish service records a day’s prime time lineup from ABC, CBS, NBC and Fox and stores up to 100 hours of those shows for up to eight days — all without the broadcasters’ consent.
“Fox has not consented to the recording of its copyrighted programs by Dish, or to the distribution by Dish to its subscribers of copies of all of Fox’s prime time programming for subsequent on-demand, commercial-free viewing,” Fox wrote in its suit.
Dish has also lodged its own federal lawsuit, seeking a declaratory judgement that its service is legal.
“Dish’s subscribers, private home viewers sitting in their living rooms, may fairly choose for themselves the content that they do and do not want to watch, and have paid for the right to do so,” Dish said in the filing. (.pdf)
Dish said that its customers, “with one click,” are doing the copying of the broadcasts, and have that right. And the broadcasters are still getting their retransmission fees, the company added.
“Dish subscribers are already paying for their television service. Dish passes along hundreds of millions of dollars collected from its subscriber base to the major television networks in the form of retransmission fees,” Dish said in its filing.
Analysts suspect the ad-skipping feature was just introduced to give Dish leverage in the next round of retransmission-fee negotiations. The Big Four broadcasters’ retransmission fees doubled last year to combined $394 million, and might double again this year, Variety said.
Variety quoted Janney Capital Markets analyst Tony Wible as saying the broadcasters are overstating their case. He suggested the ad-skipping feature might eat into 1 percent of their advertising revenue, about $162 million.
But the feature does point to an interesting possible future of a TiVo without real limitations. Given how storage prices continue to drop and that you can buy a 1Terabyte hard drive for under $100, one could imagine a future where anyone who wanted to could skip all commercials by having every show recorded to disk.
The development comes a week before a New York federal judge is set to hear broadcasters’ arguments that an upstart technology company called Aereo that streams over-the-air broadcasts to New Yorkers should be shut down.
Aereo’s New York customers basically rent two tiny antennas, each about the size of a dime. Tens of thousands of the antennas are housed in a Brooklyn data center. One antenna — unique to a customer — is used when a customer wants to watch a program in real time from a computer, tablet or mobile phone. The other works with a DVR service to record programs for later online viewing.
Federal retransmission licensing agreements are silent when it comes to internet streaming, so Aereo claims it does not have to licensing fees. The broadcasters claim Aereo is practicing “technological gimmickry” to skirt paying them licensing fees.