Dish's new ad-skipping feature has aroused anger among TV broadcasters, but the company's chairman sees it as a wake-up call to the industry.
In a recent interview with The Wall Street Journal, Dish Chairman Charlie Ergen defended Ad Hop, the new feature that lets Dish viewers skip advertisements.
Cheap Web-based TV is a threat to pay TV, believes Ergen, a trend created in part by the networks themselves because of their failure to develop ads better targeted toward viewers. Ergen is hoping Ad Hop will convince TV networks to create "more meaningful" ads that people won't want to skip over.
The Dish chairman thinks broadcasters and advertisers alike need to change how they do business or "they run the risk of linear TV becoming obsolete." The existence of Ad Hop may help force that change, according to Ergen, because now the industry is at risk of taking no action.
"If the ad is skipped, the consumer likes it, but it's not necessarily good for me and it's not necessarily good for the broadcaster because I'm in the same ecosystem as him," Ergen told the Journal. "So we have to figure out how the broadcaster benefits, we benefit and the consumer continues to feel like he gets a fair deal."
Ergen also pointed to a lack of consistency among TV networks. Many feature their own programs for free on their own Web sites or on sites like Hulu. And the online shows often carry fewer ads than they did when initially seen on TV.
Several TV networks have sued Dish over Ad Hop, but Ergen sees that response as "more emotional than realistic." However, some networks and advertisers seem dubious about Ergen's motives.
A Fox spokesman told the Journal that Ergen's use of "technology to exploit others' intellectual property for personal gain is not a new or innovative idea." CNET parent company CBS said that "we expect our programming content to be handled responsibly by distributors." And one ad exec compared Ergen's suggestions to "putting nice drapery on top of a casket."
Dish can debate the use of Ad Hop with networks and advertisers. But there's no question that Web TV continues to gain more traction and more status.
No longer home to just amateur YouTube videos, the Web is now a thriving platform not simply for viewers but for creative talent.
Avengers director Josh Whedon made a huge splash on the Web a few years back with his "Dr. Horrible's Sing-Along Blog" series. Actress , who appeared in the Dr. Horrible episodes, has gained online fame with her series "The Guild" and recently launched her own YouTube channel.
I don't know if more targeted ads will make a difference. But there's no question that traditional networks need to evolve or risk losing even more viewers to the World Wide Web.