The Dish’s Hopper: customer choice or copyright infringement?

By: Laura Levin-Dando

According to recent complaints filed by several major television networks, there may be a fine line between traditional time-shifting, digital video recording (DVR) technology and copyright infringement. NBC, Fox, and CBS each filed complaints in federal court in California on May 24, claiming that Dish Networks is violating copyright law in the way it broadcasts content to its subscribers. Dish provides its subscribers with the “Hopper,” a device that records and stores content, and also allows subscribers to view network content commercial-free, through a “Primetime Anytime” feature. Primetime Anytime essentially functions to copy and store all primetime programming from a number of television networks on an eight day cycle, and it does not require any action on the part of the subscriber beyond activating this function. (Thus, the networks maintain that it is distinguishable from a traditional DVR, which requires a viewer to take affirmative steps to designate the particular hours during which the device should record content.) Furthermore, when activated, the Hopper’s “Auto Hop” function automatically skips all commercials while viewers play back recorded content. According to Fox, Auto Hop does not serve as a typical DVR time-shift mechanism. A traditional “fast-forward” function prompts viewers to manually pass over commercials; conversely, Auto Hop serves as an automatic setting in which the viewer may choose to have the presentation simply skip commercials.

This novel service poses a number of issues, which are addressed in the networks’ complaints. First of all, the networks claim that Dish’s recording and storage of the networks’ programming is unauthorized and thus in violation of copyright law. If the law comes out on the side of the networks, Dish may be liable not only for direct infringement (the copying and distributing of content that violates the networks’ exclusive rights as copyright holders), but also for indirect copyright infringement. The networks assert that by advertising, providing customer service, and making the equipment and technology available to consumers, Dish induces and contributes to copyright infringement on the part of its subscribers. Second, according to the networks, the Hopper’s Auto Hop function threatens the “fundamental underpinnings of the broadcast television ecosystem.” In other words, the networks invest substantial amounts of money into the production and dissemination of their content and rely heavily on advertisers to provide a return on their investment. Normally, advertisers are willing to pay top dollar to have their ads placed during or around primetime programming hours. However, if viewers use a device that automatically skips commercials, the networks contend that advertisers will be far less likely to pay networks for ad placement during primetime hours, compromising a primary source of network revenue and therefore the networks’ ability to produce its programming. Along with advertiser-supported broadcasts, networks generate revenue through licensed broadcasting of programs on an on-demand basis through individual cable television providers, on-demand online access (both on the network’s own website, as well as licensed websites, available with commercials, or commercial-free), domestic syndication, and sale of “fixed media,” such as DVDs and Blue-Ray Discs. The networks worry that Dish’s services threaten to displace a substantial amount of their revenue stream.

In its complaint, Dish asserts that its services simply give consumers more control over an already-existing right to choose not to watch certain content that they do not desire to watch. Claiming that “this case is about freedom of consumer choice,” Dish states that Auto Hop fits into a long-standing history of time-shifting in television viewing (dating back to the VCR), which allows viewers to choose to skip over commercials. Auto Hop simply provides a more efficient, streamlined way for subscribers to watch television, with the option to view network programming commercial-free. Since Auto Hop does not technically modify the original recording at all (i.e. commercials are not deleted, and may be viewed on the recording), Dish should not be found to be acting in violation of copyright law. From a policy perspective, there is a compelling interest in guaranteeing consumers an efficient tool with which to control their television viewing. Dish does pay the networks a substantial amount of money (hundreds of millions of dollars per year, according to Dish’s complaint) in exchange for the licenses to broadcast the networks’ content. It thus stands to reason that Dish subscribers should be offered a prime viewing experience, and Dish is justified in its pervasive argument that the service it provides customers should not be compromised. However, it appears as though a fact-finding will be necessary to settle what seem to amount to factual disputes regarding Dish’s contracts with the networks, as well as the extent of potential copyright infringement taking place.

Source: http://www.hollywoodreporter.com/thr-esq/fox-cbs-nbc-sue-dish-329287