Tag Archives: Dish Network

Distribution

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By Ali Zaslav

          What’s Changed in TV Distribution?

In the television business, distribution is the key component in making content accessible and viewable by consumers on traditional and new platforms. Distribution is not only the way programming reaches audiences, but is a large component of programmers and distributors business models.

laptop_ipad_iphoneTraditionally TV distribution used to be much simpler; it was primarily through TV and consumed on the TV set. In this old media structure there were barriers to reaching consumers, (you would have to own a network or have a program carried by one). Today broadband allows for video content to be carried and viewed on the web. Countless individuals and companies can now reach viewers in new ways with all types of video content.

promo-tv-everywhereTelevision is still the primary way people consume video but new devices and new content are beginning to change consumers viewing behavior.  Viewers can watch traditional TV or now have the option to aggregate their favorite videos through many new options like Netflix, Hulu, Amazon, or TV Everywhere and watch them on their TV, or a tablet, phone or computer. The rise of new platforms to distribute TV content through DVR and VOD plus online viewership has resulted in a number of exciting developments for programmers and distributors, as well as real threats and challenges.

cableRight now television content distribution can be broken down into three categories: traditional distributors, new challenging distributors, and programmers that try to take advantage of all avenues of distribution.  Programmers now distribute through the traditional multi-channel operators (Time Warner), phone companies (Verizon & AT&T) and satellite distributors (like Dish and DirectTV) and new avenues like apps, TV Everywhere through a cable operator or digital offerings like Netflix.

Traditional Distributors in the TV Market

MSO’s, satellite, and phone companies are actively trying to delve into the growing market of cross platform viewing and video streaming. A recent development is TV Everywhere.

xfinity_logoComcast successfully released Xfinity on demand and struck deals with cable networks, broadcasters, and pay TV to stream their content online for Comcast subscribers. Applications like TV Everywhere are being released by a multitude of distributors, allowing consumers to stream their carried programming on any tablet, phone or computer. Time Warner now has TWC TV and Cablevision has TVtoGO.  Phone companies also provide online streaming; Verizon streams FiOS TV and AT&T streams U-verse.

directv everywhere

In February, DirectTV joined the online game and released DirectTV Everywhere. For traditional distributors, “TV Everywhere” has become an important part of their distribution model. But their applications have a lot of competition coming from Netflix, HuluPlus and Amazon which offer library’s of content and more recently original or exclusive programming.

Rising Challengers to Traditional Distributors

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The development of broadband as a vehicle for video has spurred huge entrepreneurial investment in companies like Netflix, Apple, Amazon, Hulu, YouTube as well as user-generated content. Traditional distributors are being challenged by new online distribution channels like Netflix, Hulu, Amazon, Apple TV, and Google (YouTube). These distributors are offering very appealing services to consumers and at low costs (Netflix & HuluPlus: both $8 a month and Amazon Prime $79/ yearly), or in the case of the web, Google or YouTube for free (you only need to have broadband). In addition, there is easy access through many devices like the computer, Xbox, iPad, etc with a wide range of content. We know this is appealing to consumers since Netflix recently grew to almost 28 million subscribers[1].house-of-cards-poster

For the past few years Netflix, Amazon and HuluPlus have provided old shows, almost like a library service. This year Netflix shook up its programming strategy when it released original content “House of Cards”. They did what no distributor or programmer has done before: presenting an entire television series “House of Cards” to subscribers upfront.  The viewer can than choose to watch the show all at once or at their own pace instead of once a week. In some ways, this strategy makes Netflix a competitor to HBO and cable channels. It also has blurred the lines as to what kind of company Netflix is: a distributor or original programmer? Further following a similar lead, Amazon is now promoting that they have exclusive content that you can only find and watch on Amazon[2].

apple_tv_boxApple’s release of the Apple TV has further blurred the lines of traditional distribution; offering the perks of online streaming and TV together. Further Hulu Plus and other services are offered on the Apple TV [3]. These advancements have changed how the media works and how television content is distributed to consumers. Netflix offering original content, the Apple TV, Hulu Plus and Amazon’s exclusive content offerings shows how fast things are transforming in the distribution and video content business
  TV Programming Distribution Strategies
Broadcast and cable networks, to stay competitive, have been dabbing into online streaming, tablet apps, and phone applications. Most cable networks do their best to offer applications that distribute some recent episodes, behind the scenes clips, best of clips, etc. However cable networks tend to limit the amount of long-form content because the distributors they partner with would not pay them as high of a sub fee for their programming. A critical part of the business model for cable programming services is maintaining a strong sub fee with distributors.

[15]Cable channels like A&E, Discovery, History, Lifetime and many others have iPad applications. Disney offers “Watch” to stream ESPN and Disney Channel to computers and other devices [4]. Recently on the broadcast side, broadcasters have been making more content available on their websites and through services like Hulu.  Since broadcast don’t rely on sub fees they have been much more aggressive in moving their content to other platforms than cable. And just this month ABC and CBS both came out with tablet applications to stream their television series.

Conclusion

Distributors have been and must adapt to new technologies, platforms and consumer demands.  Despite the buzz that cable and broadcast are “dying mediums,” the Neilson graph below shows that while online viewership is increasing, people are still consuming a large percent of content on the TV set[5]. eeeee

The real measure of the success of TV distributors will be how well their offerings satisfy consumer interests in viewing content how and when they want too. If the traditional distributors don’t provide it, new companies like Netflix and Apple will meet that demand.

 

 

Regulation of Distribution

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By: Chelsea DeCesare

History

948.AntiqueTelevision

Regulation in the cable industry refers to who has the rights to distribute broadcast station signals, and to whom. Regulation of cable distribution first came about in the 1940’s, when cable television system operators placed antennas in areas with good reception, picked up broadcast station signals, and then distributed them by coaxial cable to subscribers for a fee.[1]

Early Cable SatelliteToday, the distribution systems are far more complex. Consumers now have the option to decide when they want to view television content, and if they want to “binge view” through video on demand programs. With a variety of mediums available to take in content, it has become difficult for broadcasters to manage and regulate how and where materials are being viewed.

With the invention of the Digital Video Recorder or DVR as well as Video on Demand technology, both consumers and companies have the power to record and disseminate live television. For many cable and network providers, this budding technology has threatened vital advertising and subscription revenues.

The Evolution of the DVR

Tivo and ReplayTV

tivo_premiere In January 1999, TiVo unveiled it’s Personal Television Service at the National Consumers Electronics Show. After unveiling the first working prototype, and despite an estimated four to five months of work remaining to complete a real working product, the company shipped the first DVR on the planet on March 31, 1999. [2]

ReplayTV also premiered in 1999, and allowed viewers to record, rewind, and store cable and broadcast programs of the consumers choosing. [3]

Both TiVo and ReplayTV currently charge subscribers anywhere from $80 to $200 for their services. Additionally, the services act as a liaison between television signal providers and viewers. They interpret the signals from a provider and allow consumers to tell them what programs they want to record. [4]

As a result, there were no initial regulations placed on TiVo, as the content being recorded had to be obtained through a cable subscription.

Video on Demand

Television video on demand or VOD systems first came to prominence in the 2000’s. VOD’s either stream content through a set-top box, a computer, or smart device. With a VOD, viewers can either watch in real time on television, or download to an outside device for viewing at any time.

With the creation of internet VOD systems, companies looked to pen licensing agreements with media companies in order to provide viewers with a library of shows and movies that they could access at any time.

Netflix

lifestyle_1600_mockIn January of 2013, Netflix signed a multi-year licensing agreement with both Turner Broadcasting and Warner Brother’s Television Group.

The agreement includes episodes of shows from Cartoon Network, Warner Bros. Animation, Adult Swim, and TNT. The deal, which will only make content available to U.S. Netflix subscribers, went into effect on March 30, 2013. [5]

originalAdditionally, in December of 2012, Netflix and Disney reached a first time licensing agreement that allowed the streaming of back catalog classic Disney films including Dumbo, Pocahantas, and Alice in Wonderland.

The Disney deal stipulated that by 2016, all new theatrically released films in the pay TV window will be able to be watched instantly. This includes all films produced by Disney, Walt Disney Animation Studios, Disneynature, Pixar Animation Studios, and Marvel Studios. [6]

New and Controversial On Demand Systems

The Hopper

 

Aereo

Backlash

Dish Network vs. Network TV

In September of 2012, Fox, NBC Universal, and CBS filed a copyright infringement lawsuit against Dish Network. The lawsuit was in response to the release of new software called “The Hopper,” which allows subscribers of the satellite network to skip commercials during programs that have been previously recorded.

TWiBTV-7The broadcast networks asserted that new DVR technology is a violation of their copyrights and puts programming in danger by undermining advertisements which still make up a bulk of programming revenue.

In a court filing Dish Network said:

“This case is about freedom of consumer choice, individual families’ choice to elect, if they want, to time-shift their television viewing and watch recorded television without commercials.”

 

The Hopper system was officially released on May 10, 2012 and is only currently available to PrimeTime Anytime service customers.

dish-signWhile the lawsuit is being settled, Fox has refused to air any Dish Network commercials that feature the Hopper service. [7]

Aereo vs. Broadcast Networks

Last year, CBS Corporation, Comcast, News Corporation, and the Walt Disney Company filed two suits against Aereo, a start-up Internet service that streams stations without compensating them.

The lawsuits were first filed in March 2012, mere weeks before the service was set to premiere in New York. However, a district court judge denied the request for a preliminary injunction last summer. [8]

On April 1, 2013, a federal appeals court in New York upheld a ruling in favor of Aereo.

Aereo is able to stream broadcast stations by operating an array of tiny antennas that pick up over-the-air signals. Subscribers pay about $12 a month, and receive control over one antenna. Aereo basically turns the subscriber’s phone, computer or tablet into a small television set, but without the rabbit ears that would normally be needed. Subscribers can then select programming over the internet.[9]

An array of antennas in Brooklyn allow Aereo to avoid paying the retransmission fees that operators have traditionally paid for access to stations. Those fees are an increasingly important revenue source for the stations.

The Court of Appeals for the Second Circuit affirmed the lower court ruling on April 1,  in a 2-to-1 decision, saying that Aereo’s streams of TV shows to individual subscribers did not constitute “public performances,” and thus the broadcasters’ copyright infringement lawsuits “are not likely to prevail on the merits.” [10]

The Future

Looking ahead, Aereo’s win in court may make other companies more comfortable in joining the service. Some prospective partners include cable channels that want carriage (Bloomberg TV signed the first such deal with Aereo last year) and wireless providers. And the mere existence of the service may cause the broadcasters to speed up their own plans for streaming programming to phones and tablets.

Analysts suggest that some cable and satellite providers, such as those that pay billions of dollars in retransmission fees for the right to carry broadcasters’ signals, might start to mimic Aereo’s system to get around the fee requirements. Others predicted that the broadcasters might lobby Congress to change the law. [11]

The outcome of this case will undoubtedly influence the way future systems do business in the future. In the meantime, all we can do it wait, and watch for the next big thing to enter the market and revolutionize the business yet again.

Sources:

1. FCC Encyclopedia: “Evolution of Cable Television”                                    http://www.fcc.gov/encyclopedia/evolution-cable-television

2. Tivo: History                                                                                          http://www.tivo.com/jobs/questions/history-of-tivo/index.html

3. ReplayTV: History                                                              http://www.replaytvupgrade.com/replaytvcompanyhistory.htm

4. Tivo Updated Payment Plans March 2013                                             http://www.tivo.com/abouttivo/policies/tivoservicepaymentplanstermsandconditions.html

5. CNN Money: “Netflix Scores Cartoon Network Adult Swim and More Time Warner Content.”                                                                                               http://money.cnn.com/2013/01/14/technology/netflix-time-warner/index.html

6. Bloomberg Online: “Disney’s Netflix Deal Gives Top Billing to Online Movies.” http://www.bloomberg.com/news/2012-12-05/disney-s-netflix-deal-gives-top-billing-to-online-movies.html

7. CNN Money: “Broadcasters Sue Dish Over Ad-Skipping DVR.”         http://money.cnn.com/2012/05/25/technology/dish-auto-hop-lawsuit/index.htm

8. Newser Online: “Divided NY Federal Appeals Court Rejects Lawsuit, Giving Green Light to Aereo Live TV Service.”                                                                   http://www.newser.com/article/da5cvfj81/divided-ny-federal-appeals-court-rejects-lawsuit-giving-green-light-to-aereo-live-tv-service.html#continuedBelow

9. A New Domain Blog: “Aereo: How It Works and How It’s Working So Far.” http://anewdomain.net/2012/04/06/aereo-has-launched-lets-hope-they-are-for-real/

10. The Wall Street Journal: “Court Denies Broadcasters’ Motion to Shut Down Aereo.”                                                                                                   http://online.wsj.com/article/SB10001424127887323296504578396543358747194.html

11. Bloomberg Online: “Diller-Backed Aereo Beats Network Bid to Close TV Service.”                                                                                   http://www.bloomberg.com/news/2013-04-01/diller-backed-aereo-beats-network-bid-to-close-tv-service.html

 

 

 

 

 

 

 

 

Fox Network, O&Os and Affiliates

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by Thomas Staudt

Fox Television, owned by News Corp, is one of the “Big Four” television broadcasters in the United States, and also owns a wide portfolio of cable properties domestically. Fall 2012 was a busy time for many areas of the business.

Owned and Operated Stations

Fox Sells WUTB in Baltimore

Fox O&O WUTB in Baltimore

FOX Agrees to Sell O&O WUTB in Baltimore [17]

In May 2012, Fox Television reached an agreement with Sinclair Broadcasting to renew the Fox affiliations on 19 Sinclair owned stations for five years. As part of the agreement, Sinclair paid $25 million for the Fox affiliation on WBFF in Baltimore, as well as an option to purchase the Fox owned and operated station in Baltimore, WUTB, by March 31, 2013. The station had served as leverage for Fox when negotiating with Sinclair, since Fox would threaten pulling the Baltimore Fox affiliation from Sinclair’s flagship, WBFF, and switching to their own WUTB. WUTB is the MyNetwork affiliate in Baltimore, and was unique as the only MyNetwork station owned in the Fox television portfolio. [1]

On November 29, 2012, Sinclair exercised the option to purchase WUTB, paying an additional $2.7 million. Because Sinclair owns WBFF in Baltimore, the sale is between Fox Television corporate, and a third party Deerfield Communications, controlled by sole shareholder Stephen Mumblow. Sinclair will control the station through operations contracts with Deerfield. Sinclair will also owe an additional $25 million to Fox, unless Fox exercises an option to acquire certain stations from Sinclair’s current portfolio. WUTB is the third Sinclair controlled station in Baltimore, as they also control the CW station, WNUV, owned by Cunningham Broadcasting- which is owned by the children of Sinclair’s shareholders. [2]

Fox Owned and Operated Stations Receive Uniform Graphics and Music Update

The Fox owned and operated stations (17 stations) rolled out a uniform graphics update for locally produced programming during the first week of November, 2012. The changes are for show and segment openings, as well as lower third graphics. The Fox rectangular logo has largely been replaced with the Fox name, and appears with 3D and circular elements. The standard music package has also been slightly adjusted. Finally, Fox owned stations have standardized the practice of showing reporter’s Twitter handles, rather than email addresses under their name on air. [3] 
[18]

Affiliates

WFFF Fox Burlington Sold to Nexstar

Nexstar Broadcasting

Nexstar Broadcasting Purchases WFFF [19]

Nexstar Broadcasting announced the completion of a deal November 5, 2012 to purchase Fox affiliate WFFF in Burlington, VT from Smith Media. Nexstar agreed to pay $17.1 million for WFFF and sister station WVNY, an ABC affiliate. Mission Broadcasting is also involved in the transaction due to media ownership laws. The FCC is expected to approve the transaction in the first quarter of 2013. Upon completion of the deal,Utica,NYNBC affiliate WKTV will be the only television station still owned by Smith Media. [4]

While Burlington, VT is DMA 97, it is an important market because it reaches a substantial Canadian market not counted in its DMA size. This includes Montreal, a city with ten times more population than the entire Burlington DMA. Canadian cable operators carry WFFF in the southern Quebec province as their Fox station. [5]

4 Northwest Broadcasting Fox Stations Pulled From Dish Network

Northwest Broadcasting pulled four Fox affiliate stations off of Dish Network after retransmission renewal negotiations broke down on November 26, 2012 over a dispute about rate increases. The stations affected are WICZ in Binghamton, NY; KMVU in Medford, OR; KFFX in Yakima, WA; and KAYU in Spokane, WA. After months of negotiations, a deal could not be reached, and the signals went dark to Dish Network customers.

The impasse comes only two months after a long blackout of the same stations ended with Dish competitor DirectTV. The Northwest- DirectTV battle lasted for over 22 months, and at times was hostile. [6]

LIN FOX Stations Almost Pulled From Charter

LIN TV threatened to pull two other Fox affiliates, WNAC in Providence, RI and WLUK in Green Bay, WI off of Charter Communications cable platforms if increased retransmission rates were not agreed to by November 29, 2012. Charter claimed that LIN was demanding 150% increases in fees. [7] At the last moment before the stations were scheduled to go dark, the two sides reached a deal for undisclosed terms. [8]

Syndication

Fox O&O Stations Purchase Syndication Rights to Anger Management

Anger Management Promotional Poster

Charlie Sheen stars in Anger Management on FX [20]

Fox owned and operated stations signed a syndication contract in October, 2012 to begin airing the FX sitcom Anger Management starring Charlie Sheen beginning in the fall of 2014. FX will retain the cable syndication rights sold by Lionsgate Television. Lionsgate’s television division plans to produce 90 episodes over the next two years in order to fulfill syndication requirements. This follows a model the company has used in the past to get syndication fees sooner. Anger Management averaged 4.5 million viewers per episode during its initial summer run; new episodes begin in January. [9]

Fox O&Os Purchase Rights to Veteran’s Day Parade

NYC Veterans Day Parade Logo

The 2012 NYC Veteran’s Day Parade aired on Fox Stations [21]

Fox owned stations came to an agreement with the Wounded Warriors Project for the television rights to the New York City Veteran’s Day Parade for the first time in 2012. Fox owned stations aired the parade live or tape delayed (depending on local NFL games) with cut-ins from Fox News cable network. The live showings of the parade aired Sunday November 11, from Noon until 3:30 Eastern time. [10]

Bethenny Frankel Daytime Show Picked up by Fox Owned Stations

Fox owned and operated stations have signed a syndication deal to air the daytime talk show Bethenny, hosted by former reality television star Bethenny Frankel, and executive produced by Ellen DeGeneres. The show was left for dead in 2012, after it failed to achieve Fall 2012 clearances, but Fox kept the show alive by airing it on six owned stations for a trial period of six weeks during the summer. The positive results gave enough of a sample and momentum for Warner Brothers Distribution to syndicate nationally in other markets. The show is expected to premiere in early 2013. [11]

Ownership

Fox Purchases Stake in YES to Assist Clearance

YES Network Logo

FOX Purchased 49% of YES [22]

On November 20, 2012, News Corp, agreed to purchase a 49% ownership stake in the YES Network. A specific price was not released, but analysts estimate the network to be valued at $3 billion. News Corp completed the deal with Goldman Sachs and Providence Equity Partners. The contract includes a path for Fox to increase its ownership stake to 80%. YES has rights to air New York Yankees baseball through 2042, and is expected to be used as leverage to increase retransmission rates and clearance for other Fox properties in the nation’s largest market and surrounding areas. [12]

Sports

Fox launches Saturday Night Football and Baseball

Erin Andrews

Erin Andrews Joined Fox to Anchor Sports Coverage [23]

For the first time in 2012, Fox aired weekly college football games on Saturday nights anchored by the popular Erin Andrews. Fox drew ratings as high as a 3.5 overnight, on a night previously ignored by networks and viewers. Fox also moved its Saturday afternoon baseball to Saturday nights, seeing ratings increases of over 25% for the season. [13]

Legal

Fox Denied in Suit Against Dish Network’s DVR

United States District Court ruled on November 29, 2012 against Fox Broadcasting in its attempt for an injunction against Dish Network’s advanced DVR and ad-skipping technology. The court found that Fox was not likely to succeed on the merits of copyright infringement against the DVR service, and that Fox had failed to show irreparable harm caused by the “quality assurance” ad-free copies made to show customers. [14]

Technology

 Fox Joins with Dyle to bring Television to the iPad

Dyle Ap

Dyle Can Bring Television to the iPad [24]

Fox has joined a consortium of broadcasters to allow people to legally watch the Fox television network for free on their iPad. Called Dyle, the program requires an antenna adapter since the device does not use the internet, instead using television broadcast signals. The technology is improving, and is a large step towards bringing television to the iPad. [15]

Performance

1st Quarter Financial Data for News Corp.

News Corp’s 1st Quarter (July-Sept) financial data showed a slow start to the television year. Overall company revenues were up 2.2%, but operating income down .5% to $1.38 billion. The company reported higher than expected political advertising spending, and a more than doubling on average of retransmission rates, but also had a poor start to the network season ratings. The Fox broadcast network and owned and operated stations posted a 17.3% increase in operating income to $156 million, while Fox cable properties showed 23% increase in operating income to $953 million.

The scatter market was not robust as the company had hoped, and the Olympics siphoned off some potential revenue, but Fox is working towards its stated goal of a dual revenue stream of retransmission revenue and reverse affiliate compensation. A low- rated four game World Series and poor fall launches hurt the quarterly performance, but projections for the 2nd Quarter are more optimistic. [16]

 References

  1. Malone, M. (2012, November 29). “Fox Selling WUTB to Deerfield Media for $2.7 Million”. Broadcasting and Cable.  http://www.broadcastingcable.com/article/490598Fox_Selling_WUTB_to_Deerfield_Media_for_2_7_Million.php
  2. Jessell, H. A. (2012, November 29). “Sinclair Makes it a Triopoly in Baltimore”. TV News Check. Retrieved from http://www.tvnewscheck.com/article/63866/fox-sellingwutb-baltimore-to-deerfield-llc
  3. Newscast Studio. (2012, November 16). “Fox Owned Stations Roll Out Graphics Overhaul”. Newscast Studio. Retrieved from http://www.newscaststudio.com/blog/2012/11/16/fox-owned-stations-roll-out-graphics-overhaul/
  4. Knox, M. (2012, November 5). “Nexstar Acquires Stations in California, Vermont.” Media Bistro. Retrieved from http://www.mediabistro.com/tvspy/nexstar-acquires-stations-in-california-vermont_b68213
  5. TV NewsCheck. (2012, November 5). “Nexstar Adding Stations in Calif. and Vt.” TV News Check. Retrieved from http://www.tvnewscheck.com/article/63324/nexstar-adding-stations-in-ca-vt
  6. Stiles, G. (2012, November 28). “New Battle for Northwest Broadcasting Inc”. Oregon Public Broadcasting. Retrieved from http://www.opb.org/news/article/new-battle-for-northwestbroadcasting-inc/
  7. Donohue, S. (2012, November 20). “LIN TV Threatens to Pull CBS, NBC, Fox Stations from Charter Communications”. Fierce Cable. Retrieved from http://www.fiercecable.com/story/lin-tv-threatens-pull-cbs-nbc-fox-stations-charter-communications/2012-11-20
  8.  Donohue, S. (2012, November 30). “Charter Signs Last-Minute Deal with LIN TV”. Fierce Cable. Retrieved from http://www.fiercecable.com/story/charter-signs-last-minute-retransdeal-lin-tv-still-no-directv-gannett-agre/2012-11-30
  9. Porter, R. (2012, October 31). “Charlie Sheen’s Anger Management Sold into Syndication, Which was Point All Along”.  Zap 2 It. Retrieved from http://blog.zap2it.com/frominsidethebox/2012/10/charlie-sheens-anger-management-sold-into-syndication-which-was-the-point-all-along.html
  10. Wounded Warriors. (2012, November, 8). “New York City Veterans Day Parade to be Broadcast in 10 Major Markets”. Market Watch. Retrieved from http://www.marketwatch.com/story/new-york-city-veterans-day-parade-to-be-broadcast-in-10-major-markets-2012-11-08
  11.  Andreeva, N. (2012, September 24). “Bethenny Frankel’s Talk Show to Launch on Fox Stations in 2013”. Deadline. Retrieved from http://www.deadline.com/2012/09/bethenny-frankels-talk-show-to-launch-on-fox-stations-in-2013/
  12. Jannarone, J. (2012, November 20). “News Corp. to Buy 49% of YES Network”. Wall Street Journal. Retrieved from http://online.wsj.com/article/SB10001424127887324851704578131030193577240.html
  13. Hiestand, M. (2012, November 4). “Saturday Nights: The Future of Big-Time TV Sports?” USA Today. Retrieved from http://www.usatoday.com/story/sports/2012/11/04/michael-hiestand-television-college-football-ratings-dan-patrick-notre-dame-alabama-lsu/1681031/
  14. Davidson, S. (2012, November 29). “Federal district court refuses to enjoin DISH Network’s advanced DVR and ad-skipping services”. Lexology. Retrieved from http://www.lexology.com/library/detail.aspx?g=f124e36b-91d0-441b-a617-1adb5aa26470
  15. Kafka, P. (2012, November 19). “Dyle Brings Legal, Live TV to Your iPad, With Many Strings Attached”. All Things SD. Retrieved from http://allthingsd.com/20121119/dyle-brings-legal-live-tv-on-your-ipad-with-many-strings-attached/
  16.  Messmer, J. (2012, November 6). “News Corp. Admits Soft Fall Start for Fox”. TV News Check. Retrieved from http://www.tvnewscheck.com/article/63366/news-corp-admits-soft-fall-start-for-fox
  17. Image. “WUTB Logo”. WUTB. Retrieved from http://www.my24wutb.com/
  18. Video. “November 12, 2012- Fox 13 WHBQ”. Newscast Studio. Retrieved from: http://www.newscaststudio.com/blog/2012/11/16/fox-owned-stations-roll-out-graphics-overhaul/
  19. Image. “Nexstar Logo”. Logos Wikia. Retrieved from www.logos.wikia.com
  20. Image. “Anger Management”. TMZ. Retrieved from http://www.tmz.com/category/anger-management/
  21. Image. “NYC Veterans Day Parade 2012 Logo”. Wounded Warrior Project. Retrieved from http://www.vetsday.org
  22. Image. “YES Network Logo”. SNY Networks. Retrieved from http://snynets.com/nets/nets-already-helping-yes-network-grow/
  23. Image. “Erin Andrews.” Daily Glow. Retrieved from http://www.dailyglow.com/beauty-news/erin-andrews-shares-her-best-beauty-tips-for-game-day.html
  24. Image. “Dyle”. Dyle TV. Retrieved from http://www.dyle.tv/devices/elgato-eyetv-mobile-tv-tuner/

Regulation of Distribution

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by Baindu N. Saidu

Distribution refers to the means by which television programming is delivered to consumers. It is done through traditional means like Broadcast, Cable or Satellite television, or through newer means like Video on Demand (VOD), Digital Video Recording (DVR), and online Subscription Video On Demand (SVOD) services like HULU Plus and Netflix.

When it comes to overseeing and regulating of these different means of mass television distribution, the Federal Communication Commission (FCC) is the principle government agency in charge. Its jurisdiction covers the means of mass emerging television technologies at the intersection of telephone, internet, computing, and digital signals. [1].

 

via the FCC website (http://www.fcc.gov/logos)

Several events have been ongoing during this semester related to the regulatory and legal aspects of distribution include a satellite provider, Dish’s disputes with both cable and broadcast networks, and the FCC’s ongoing plans for an incentive auction to reclaim spectrum space for wireless operators.

Dish Network vs. AMC Networks

The Networks’ dispute started years earlier with Cablevision’s lawsuit against Dish over their Voom HD channel which Dish stopped carrying in 2008. AMC was spun off from Cablevision in 2011. In April 2012, Dish notified AMC that it would drop their channels and by July, when their contract expired, Dish removed AMC Network channels AMC, WEtv, IFC, and Sundance from its lineup [2].

The companies indicated different reasons for the dispute. AMC stated that DISH dropped its programming because it wanted to gain leverage in an unrelated lawsuit involving Cablevision and their Voom HD channel [3]. DISH, conversely stated that the dispute was over “bundling,” in which big networks like AMC try to sell several of their channels, both high- and low-rated, to providers in a bundle to get a better price [4].

 

Image via Deadline website (http://www.deadline.com/tag/dish-network/)

By September, Dish’s 14 million subscribers had been without any AMC channels for more than two months and feared not be able to view the season premiere of the AMC hit show, The Walking Dead, set to premiere October 14. Speaking on the dispute, Dish’s senior vice president of programming, Adam Shull stated that “The problem is they’re asking me to pay for four channels for really what is the price of three shows,” thus Dish wouldn’t be paying for any AMC shows [5].

On their part, AMC turned to social media in a quest to get their channels back on Dish, launching a YouTube video contest for angry Dish subscribers called “Hey DISH, Where’s my AMC?” [6].

The conflict would not be resolved until October 21 when Cablevision and AMC Networks settled their lawsuit with Dish Network for $700 million. The deal brought to end a dispute over whether Dish breached an affiliate agreement by terminating AMC’s Voom HD Network in 2008. At a trial that began in late September, AMC sought some $2.4 billion in damages from what it believed was Dish’s improper termination. Dish had defended itself by saying that it had the authority to cancel the Voom deal based on a contractual clause requiring Cablevision/AMC to invest $100 million per year on the channel. As part of the deal Dish also reached a new carriage agreement with AMC, bringing the network back to their lineup along with IFC, Sundance, and WEtv [7].

Dish Network’s AutoHop vs. Broadcasters

Image via Dish Network Website (http://godish.com/)

Another battle Dish Network has been involved in pertains to the AutoHop feature for its DVR systems, Hopper and Joey. Introduced in March, Autohop, an International Consumer Electronics Show (CES) Innovations 2013 Design and Engineering Award Honoree, allows users who are watching Primetime Anytime recordings to completely skip commercials. When the user starts watching a recording, they are allowed to choose whether or not to skip commercials. Users who choose to skip the commercials move from segment to segment of TV shows without having to watch the ads [8]. This feature has undoubtedly caused uproar with broadcasters, who depend on ad sales for a majority of their revenue.

In May, three of the major broadcasters (CBS, NBC, and Fox) filed suit against Dish Network in Los Angles, contending that the technology violated copyright law. Dish simultaneously filed a suit against ABC, CBS, and NBC in New York seeking a declaratory judgment affirming the legality of their technology [9].  In documents filed August 22, Fox’s lawyer argued that AutoHop was in “violation of the express terms and conditions of its contracts with Fox and federal copyright law. Both parties argued their respective points of view in front of U.S. District Court judge, Dolly Gee, on September 21 in Los Angeles. On November 6, Gee denied Fox’s request for a preliminary injunction that would shut AutoHop down. Gee, in denying Fox said, “Although Dish defines some of the parameters of copying for time-shifting purposes, it is ultimately the user who causes the copy to be made.” She also pointed out that Fox hadn’t proved there would be “irreparable damage” if no injunction was issued. Any harm to Fox, she said, could be relieved by monetary damages. The judge did agree with Fox though that Dish had likely committed copyright infringement and broken the contract between the two companies in making copies of Fox programming for alleged quality assurance [10].

On November 9, Fox filed an appeal against the denial of its request for an injunction, moving the matter from the U.S. District Court to the U.S. Court of Appeals for the Ninth District[11]. More legal action from broadcasters followed on November 24 when ABC sought a preliminary injunction from U.S. District Judge Laura Taylor Swain in Manhattan federal court to also block AutoHop [12].

The broadcasters’ reason for going after AutoHop is that it “will ultimately destroy the advertiser-supported ecosystem” they depend on for revenue [13]. The networks make more than $19 billion a year in advertising, money that pays for the high cost of programming. Without advertising, network executives say, media companies would have to charge distributors three times the current rate for their signals, added costs which would be passed on to consumers. Dish, on its part, said that it believes that the AutoHop feature does not violate the networks’ copyrights. Instead, the company said AutoHop is simply an enhancement of existing ad-zapping technologies, and ultimately a matter of consumer choice [14].

FCC Incentive Spectrum Auction

Image via Cio website (http://www.cio.com/article/717594/FCC_Approves_Wireless_Spectrum_Incentive_Auction_Plan)

The FCC is a quasi-autonomous commission that has elements of each of the legislative, judicial, and executive branches of government. It is part of the group of independent regulatory agencies (see also the FAA, FTC, and SEC) [15]. In its control of television, the FCC performs several distinct functions such as rulemaking, licensing, registration, adjudication, enforcement, and informal influence [16].

Last February, President Obama signed a law empowering the FCC to buy spectrum from broadcasters wishing to give it up and then turn around and auction it to wireless broadband carriers. The FCC is working on the implementing rules for the incentive auction — so-called because broadcasters have a cash incentive to give up their spectrum [17]. They have hopes that the auction could begin as early as 2014, but have until September 2022 to conduct the sale and license the airwaves to wireless companies [18].

For the most part, full-service broadcasters with major network affiliations and newsrooms have said they have no interest in the incentive auction, preferring to hang on to their entire spectrum so they can offer new services. However, other broadcasters that are struggling see the incentive auction as a way to recoup some or all of their investments. Speculators have also entered the market, buying up marginal stations with the intention of selling their spectrum at a profit in the FCC auction [19].

Fall FCC Spectrum Auction News

  •  September 07, 2012: FCC Chairman Julius Genachowski set to release the FCC’s framework for the spectrum auction with target of  having a report and order voted by mid-2013 and the auctions completed by the end of 2014 [20]. Full article.
  • October 04, 2012: Chairman Genachowski said that the FCC will exceed its 300 MHz target for freeing up spectrum, a target the commission set in  the National Broadban Plan [21]. Full article.
  • November 13, 2012: An anonymous group of broadcasters interested in selling their TV spectrum in the incentive auction created the Expanding Opportunities for Broadcasters Coalition and tapped former Fox and Disney lobbyist Preston Padden to lead their efforts before the FCC as the commission writes rules for the auction [22]. Full article.
  • December 03, 2012: FCC officials spelled out some financial options in a PricewaterhouseCoopers LLP webcast, urging listeners to file comments as the commission works to write rules for the auction. The deadline for comments on its Notice of Proposed Rulemaking was extended to Jan. 25, with reply comments due March 26 [23]. Full article.

With the auction yet to occur, there is more news to come. To stay updated, check out the FCC’s official website.

 

References

[1] Howard J. Blumenthal and Oliver R. Goodenough. “This Business of Television: The Stadard Guide to the Television Industry,” 3rd Ed., pg.28.

[2] http://www.nytimes.com/2012/07/02/business/media/dish-network-drops-amc-channels-in-cable-dispute.html?_r=0

[3] http://adage.com/article/media/dish-network-ceo-charlie-ergen-tv-disrupter/238527/

[4] http://www.npr.org/2012/09/13/161019358/wheres-my-amc-dish-network-dispute-drags-on

[5] http://www.npr.org/2012/09/13/161019358/wheres-my-amc-dish-network-dispute-drags-on

[6] http://www.deadline.com/2012/08/hey-dish-wheres-my-amc-video-contest-launched-channel-dispute/

[7] http://www.hollywoodreporter.com/thr-esq/amc-back-dish-lawsuit-settled-381472

[8] http://godish.com/hopper/autohop.aspx

[9] http://adage.com/article/media/dish-network-ceo-charlie-ergen-tv-disrupter/238527/

[10] http://www.deadline.com/2012/11/fox-refused-dish-network-autohop-injunction-agrees-with-copyright-infringement-claim/

[11] http://articles.latimes.com/2012/may/25/entertainment/la-et-ct-broadcast-networks-fight-with-dish-over-adskipping-has-enormous-implications-20120525; http://www.deadline.com/2012/11/fox-appeals-denied-dish-autohop-injunction/

[12] http://www.businessweek.com/news/2012-11-24/disney-s-abc-asks-judge-to-block-dish-s-autohop

[13] [14] http://articles.latimes.com/2012/may/25/entertainment/la-et-ct-broadcast-networks-fight-with-dish-over-adskipping-has-enormous-implications-20120525

[15] Howard J. Blumenthal and Oliver R. Goodenough. “This Business of Television: The Stadard Guide to the Television Industry,” 3rd Ed., pg.29.

[16] Howard J. Blumenthal and Oliver R. Goodenough. “This Business of Television: The Stadard Guide to the Television Industry,” 3rd Ed., pg.30

[17] http://www.tvnewscheck.com/article/63495/padden-heading-spectrumsellers-coalition

[18] http://online.wsj.com/article/SB10000872396390444772804577623883979783866.html

[19] http://www.tvnewscheck.com/article/63495/padden-heading-spectrumsellers-coalition

[20] FCC_Wants_Broadcast_Spectrum_Auctioned_by_2014.php

[21] http://www.broadcastingcable.com/article/489734-Genachowski_FCC_Will_Exceed_2015_Target_of_Freeing_Up_300_MHz_of_Spectrum.php

[22] http://www.tvnewscheck.com/article/63495/padden-heading-spectrumsellers-coalition

[23] http://www.tvnewscheck.com/article/63935/fcc-mulls-how-spectrum-auction-will-work