21st Century Fox had hoped to persuade a federal appeals court in LA to overturn a decision that allowed Dish Network to keep selling its Hopper DVR while the companies battle over Fox’s claim that it infringes on its copyrights and breaches contracts. But the Ninth Circuit Court of Appeals ruled that Fox didn’t show that it was likely to win its case against the Hopper, which can automatically jump past commercials on recorded broadcast network shows — undermining the value of the ads. Fox says that it is “disappointed in the court’s ruling, even though the bar to secure a preliminary injunction is very high. This is not about consumer choice or advances in technology. It is about a company devising an unlicensed, unauthorized service that clearly infringes our copyrights and violates our contract. We will review all of our options and proceed accordingly.”
I can see why news like this seems good from a short-term perspective. And the ad sales model of television obviously isn’t dead yet, though ad sales growth in television may be slowing.
But I think it’s important for consumers to think about the long game when they talk about skipping ads or breaking up the cable bundle. All of these piecemeal changes may feel terrific, but they raise questions about the long-term viability of everything about cable’s business model, from the bundle that’s subsidized an enormous expansion in the amount of available content and competition that’s made so much fo that content so much better, to the pricing levels for both the bundle and add-ons like HBO. I understand if you don’t want to watch ads, but what are you willing to pay to do that? I understand if you don’t want to pay for all the channels you get in the bundle, but what would you be willing to pay to keep each one of them alive? The networks are going to becoming up with answers to these questions in response to changes in the market. Consumers should think about them too, because otherwise we might end up with answers that we don’t like very much.