Seder & Chandler, LLP
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Networks fear loss of ad revenue will undermine copyrights

Whether you watch television on a Dish or DirecTV satellite, through your cable provider, Netflix, the Internet, or the old fashion way with rabbit ears, wouldn't it be great to watch our favorite TV show without commercials? Don't all of us in Massachusetts wish we didn't have to interrupt plot lines with those loud, pesky ads?

Unfortunately, those commercials pay for the production our favorite shows. So, when the Dish Network Corporation introduced the "Hopper," a digital video recorder that allows viewers to fast forward through the commercials, three of the four major networks filed business litigation lawsuits in federal court.

Networks say allowing viewers to skip through the ads would undermine their key source of revenue. Commercials are expected to bring in more than $200 billion in the next five years.

Dish takes a different approach claiming the "Auto Hop" feature does not infringe upon the networks' copyrights, and satellite companies pay extremely high fees to the networks to air their programming. In addition, the ad-skipping DVR does not eliminate the commercials, Dish says, it merely allows viewers to fast forward through them.

The result of this legal battle could theoretically bring down the television business model that has been in existence since the dawn of broadcasting.

Obviously, the satellite company wants to negotiate a better deal for their programming rights. But it's a delicate line. In this international business and intellectual property dispute, both sides need the other to exist.

Essentially, the commercials are the pawns between the television networks and the providers in the war between high programming fees, ad revenue and viewers.

Source: News & Insight, "Dish, TV networks take fight over ad zapper to judges," Liana B. Baker and Jonathan Stempel, May 24, 2012

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