DISH Again Charged by Fox

DISH Network Corporation’s (DISH - Analyst Report) popular hopper device again came under huge criticism as News Corp. (NWSA - Analyst Report) owned Fox network appealed before the federal court in Los Angeles to stop the former to offer PrimeTime Anytime service facilities like live and recorded TV shows on smartphones and tablets to its customers via second-generation Hopper set top box.

It all began in May last year, when DISH Network launched a new technology called Auto Hop, which allows users to skip commercials at the time of watching recorded TV-shows. Introduction of such technology has created a lot of tension among major TV broadcasters like Walt Disney Co.’s (DIS - Analyst Report) ABC, CBS Corporation (CBS - Analyst Report) Fox network and NBC Universal.

The broadcast networks claim that the new feature not only violates copyright laws but also significantly jeopardizes their advertisement revenue. The end result was that all the four major TV network companies filed a lawsuit against DISH Network.

However, DISH Network believes that it has not infringed any copyright law as the new service is similar to the DVR service, which provides flexible viewing of TV shows at their own preferred time. Moreover, skipping of advertisement is possible only during recorded programs and not at the time of live broadcast of the show, hence the technology does not violate any contract agreement with the broadcasters and also sued these firms.

Despite huge criticism from broadcasters, the auto-hop device received huge mass appeal and the federal court judge has not issued any stay order on DISH Network’s popular device. Moreover, the launch of such devices has helped the company to reduce its monthly subscriber churn rate from 1.63% in 2011 to 1.57% in 2012 and also drives its ARPU to $77.10 in 2012 from $76.45 in 2011.

So, it is to be seen how the federal court deals with the fresh appeal from Fox network.

DISH Network currently has a Zacks Rank #3 (Hold).