The Hopper Hash Out

television 150x150 The Hopper Hash Out Last week, the Denver Business Journal, (BBB accredited, A+ rating,) reported that Dish Network, (non-accredited, C+ rating,) was seeking a preemptive declaration of legality for its revolutionary Hopper DVR.  The Hopper allows viewers of prime-time, network television shows to skip entire blocks of commercials, instead of clumsily fast-forwarding with the double triangle key, or conditioning your thumb with the 30 second circle arrow.

Claiming a copyright violation, the major networks, (NBC,CBS,ABC, and FOX,) have been making not so subtle threats of a lawsuit.  I read the pleading filed by Dish, and it gave me a general idea of what was happening, but it also told me that this was something I needed to dig much deeper into to grasp.  So I took a hard look at the numbers, and here’s what I found:

The Major Broadcast Corporation, Dish Network Suit by the Numbers:

The figures aren’t exact, but through blogs and census figures, I have found a fair approximation for the exact implications of prime-time commercial skipping with Dish Networks new Hopper DVR.

According to the US Census, the United States had 115 million households in 2010.

This article, tells us that 99% of those houses have televisions.

Here we read that 91% of households with televisions subscribe to some type of cable television.

As of march 23, 2011, 39.7% of households had DVR’s.

Here’s where the math gets a little funky.  The latest numbers I can find for the percentage of television users who utilize antennas were taken in 2009, before broadcasters switched to a digital signal.  Arstechnica.com states that in at the time of the transition, somewhere between 13-15% of television viewers relied solely on antenna, (we’ll call this number 14%.)

But, the article also said that only 70% of these viewers planned on getting the digital conversion box for their antenna.  10% of the devotees switched to cable, 20% of rabbit ear enthusiasts simply let their television screens go dark.  From this, we can infer that 9.8% of television viewers currently rely on antennas and digital conversion boxes.  So let’s compute:

There are 113,850,000 households with televisions in the United States.

Of those households, 103,603,500 subscribe to some type of paid television delivery system.

Of the cable subscribers, 41,130,590 regulate their watching habits with a digital video recorder, for our purposes, these people view no commercials.

11,157,300 television viewers rely solely on antennae and digital conversion boxes, for our purposes, these viewers must view every television commercial.

3,187,800 Americans use their TV’s either as decorative ornaments, or solely as a means of displaying recorded video. For our purposes, these people view no television commercials.

These numbers suggest that there are at least 44,318,390 television viewers who already have the capacity to skip all television commercials.  This represents 36% of all television viewers, and 39% of all cable subscribers.

My Thoughts:

I am surprised by the theoretical market-share that is still held by the major networks; more than 60% of television viewers have to watch commercials during primetime broadcasts.

However, it’s clear that the networks aren’t thinking that the glass is half full.  From 1948 to the early/mid 2000’s television stations had a market share that was nearly 100%, (I don’t think they were threatened by the VCR.)

For me, (and I’ve done my research,) the suit is indicative an incredible lack of foresight from every major network, except for NBC.  DVR and video-on-demand services have been on the rise for more than a decade, starting with the mainstreaming of illegal download services like Napster, (now Rhapsody, BBB accredited, A+ Rating.)  In 2011, Comcast, (BBB accredited, B rating,) a provider of digital cable, PURCHASED NBC from General Electric.   (In a side note, it would be ABSURD for NBC to be a claimant in this lawsuit.  Imagine Bill Gates suing Steve Jobs because the I-Pod was vastly superior to the Zune.) 

This lawsuit leads me to infer that aside from taking money from cable providers, the major networks are using a business plan that they hatched in 1948.  Imagine if Ford stopped innovating when they reached a pinnacle of automotive performance, the 1948 Woodie Station Wagon.

So whether or not this lawsuit evolves, it’s incredible that major broadcast television networks are still around.  And from the looks of things they have plenty of time to revamp their business plan.  As a blogger, and a fan of television, I hope the networks learn to embrace technology, and commercials, or at least commercials as we know them today, will become a thing of the past.

But I’m just a guy with a computer.  What do you think of this lawsuit?  Share your thoughts on Facebook.

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About Zaq Tull

A recent graduate of The University of Colorado, (GO BUFFS,) Zaq Tull is a racquet sport enthusiast, and an avid golfer. When he's not boisterously trumpeting the rights of consumers, you can find him experimenting in the kitchen, or with his nose buried in a thick, (and undoubtedly pretentious,) book.