Cable Execs Warn That Dish Network's Ad-Zapping DVR Could Lead To Higher Costs

Broadcasters received moral support this morning from cable in the looming battle against the new Auto Hop feature on Dish Network‘s Hopper DVRs, which enables the machines to automatically recognize and skip over ads on recorded shows. “In the end a technology like that could create real carnage for the industry,”┬áDiscovery Communications CEO David Zaslav said in a panel opening this week’s annual Cable Show. And he put Dish Network’s Charlie Ergen on notice that his programming costs could soar if he continues to sell the ad-zapper. “He needs our content,” Zaslav says. “If there isn’t going to be advertising, then there needs to be a lot higher subscriber fees.” He says the pay TV industry needs to be “disciplined” to protect the current system built around ads and subscriber payments. Time Warner Cable CEO Glenn Britt said that in the long run it could hurt consumers. “Either subscription prices are going to go up or there’s going to be less content made,” he said. “Destroying the revenue isn’t going to have the effect people think.” But AOL chief Tim Armstrong said that Dish’s initiative puts more pressure on advertisers and media companies to develop commercials that people will want to watch. “The reality is you have a superengaged consumer,” he says. “How do you make more engaging advertising tied to how people are using the media?” He urged pay TV providers to recognize how quickly consumers are starting to watch video on smartphones and tablets and “think from a mobile-first design principle.”

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