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Stiff competition in the cable and satellite market has induced DISH Network Corporation (DISH - Analyst Report) to continuously innovate and upgrade its existing product and services. Recently, the company enhanced its popular Hooper DVR device by offering advertisement free program viewing option to its viewers.
The new facility, which allows users to skip commercials by just pressing a button called Auto Hop, has been added to the Hooper device. Currently, the new Auto Hop facility is only available to the HD subscribers of four prime time channels, namely ABC, CBS, NBC and Fox. Moreover, the popular TV shows from these respective broadcasters can be stored for eight days with the free of advertisement viewing option being aired on television.
However, the new Auto Hop facility has a few drawbacks. Firstly, this service is not available when the TV show is aired for the first time on these four prime time channels. The facility is available from the very next day starting 1 AM.
Secondly, it is not the first time that such facility has been offered to the viewers. Earlier, ReplayTV also introduced commercial free viewing once the show has been recorded to customers’ DVR devices. It also offered sharing of TV shows over the internet to other ReplayTV customers.
However, the company was sued by many broadcasters as they believe that it will severely increase competition since most subscribers of cable and satellite industry will adopt ReplayTV services by giving up the satellite and cable viewing option.
So we believe that by offering such free advertisement viewing option, DISH may get into legal tussles going forward. Already the company has lost a long pending legal battle with TiVo Inc. (TIVO - Analyst Report) for violating their patent rights that resulted in a huge loss for the company.
In the beginning of fiscal 2012, DISH Network introduced an innovative HD whole-home DVR device called “Hooper” together with a sidekick called “Joey”. The device will enable the user to watch TV shows and movies in 4 different rooms at the same time and can record 6 HD shows at one time.
Hooper is developed with an in-build 2-terabyte hard disk that can store 2,000 hours of sports and entertainment contents. So with the advancement of their services that is by including the new Auto Hop facility the company will not only gain significant market share but also retain their subscribers in the near term.
Currently, DISH Network has a Zacks #3 Rank, implying a short-term Hold rating on the stock.
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