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Dish Disney Deal Swaps Ads For Flexibility

It’s been a busy week so far for Dish Network. On Monday, the satellite-TV provider reached a long-term carriage agreement with The Walt Disney Co. that includes putting limits on its controversial Auto-Hop ad-skipping service for ABC’s programming, and then revealed its Dish Anywhere remote viewing app will now be available on Kindle Fire HDX tablets in addition to iPads and Android devices.

Although the two announcements were not directly related, the two have overlapping benefits.

In the Disney deal, the two companies agreed that Dish would disable its Auto-Hop ad-skipping feature for Disney Networks for three days after programs initially air. Previously, Dish users had to wait only a day to use Auto-Hop.

The deal also provides a structure for other advertising models as the market evolves, including dynamic ad insertion, advertising on mobile devices and extended advertising measurement periods.

Dish also agreed to add several Disney channels on the Dish lineup, including Disney Junior; Fusion, a news network joint venture between Disney and Spanish-language broadcaster Univision; and two ESPN sports channels: The Longhorn Network, carrying University of Texas events and The SEC Network, which will carry Southeastern Conference college games.

In exchange, Disney’s ABC network agreed to drop its lawsuit against the Auto-Hop technology, although ABC was just one of several networks that have lined up to take a legal shot at ad-skipping technology.

Dish said it will offer the same terms to the other networks, and the Los Angeles Times quoted CBS CEO Les Moonves as saying the Disney deal was a “great first step.”

The Disney deal also opens a path to a host of second-screen services and applications, which will benefit iPad, Android and now Kindle Fire users looking to watch live TV programs, DVR recordings and thousands of on-demand titles on the aforementioned devices.

(Through the addition, Kindle Fire HDX users will be able to add the Dish Anywhere app, enabling Dish Hopper with Sling DVRs to send out live, recorded and video-on-demand content to the device. Additionally, the app gives users the ability to view program guides, set recordings and manage their DVRs. Also, through the recently added Hopper Transfers feature, Dish Anywhere app users will be able to transfer recorded content from their Hopper with Sling DVRs to their mobile devices for viewing when an Internet connection is not available.)

Dish customers will be able to access Disney’s authenticated live and video-on-demand products, including WatchESPN, Watch Disney, Watch ABC Family and Watch ABC, using Internet devices in the home and on the mobile devices, Dish said.

“The creation of this agreement has really been about predicting the future of television with a visionary and forward-leaning partner,” said Dish CEO Joe Clayton in a statement. “Not only will the exceptional Disney, ABC, ESPN entertainment portfolio continue to delight our customers today, but we have a model from which to deliver exciting new services tomorrow.”

“This paves the way for more customer choice and control over the viewing experience,” added Dave Shull, Dish chief commercial officer and executive VP.

John Skipper, ESPN president and Disney Media Networks co-chairman, stated: “We worked with Dish to smartly address the future of the multiscreen world on several levels.  Together, we are adding value to the traditional video subscription by making great content accessible across platforms and delivering new products. … At the same time, we are creating opportunities to add new subscribers and introducing the value of a multichannel subscription to a small subset of broadband-only consumers.”

After the deal was announced, several analysts speculated that Dish was also looking toward the launch of a new Internet TV business offering different broadband-delivered programming packages and prices to entice cord cutters. Disney’s stable of content would be a big get in establishing such a service.

Despite the threat of a bitter legal fight with broadcasters and strained retransmission consent negotiations, Dish said it launched its Auto-Hop feature in 2012 in the interest of giving customers what they want most. It seems apparent that in Dish’s mind consumers now want second-screen flexibility more than they want immediate ad skipping ability. It also suggests that what Dish really wanted to do was take more control over ad placement using new ad-targeting tools that give the satellite provider a bigger cut of the revenue stream.

In exchange, Dish customers get to view their programming (with more ads) on the go and at home.