Fox Broadcasting, part of Rupert Murdoch's News Corp., has asked a judge for a preliminary court ban against Dish Network's DVR feature that let consumers skip commercials, saying it would lose revenue otherwise.
Fox, in an Aug. 22 filing in Los Angeles federal court, also sought to stop Dish from offering a function that automatically records all prime-time shows on the four major U.S. networks and saves them for as long as eight days.
TV networks including Fox, CBS and Comcast's NBC sued Dish in May, claiming its new AutoHop digital video-recording feature, which allows viewers to automatically skip through commercials on recorded programs, infringes their copyrights and breaches Dish's contracts.
The services by Dish, the third-largest U.S. pay-TV company, and possibly eventually by competitors, would lead to a "massive reduction" of viewers for network TV commercials, prompting advertisers to pay less or stop buying spots altogether, Fox said.
"PrimeTime Anytime and AutoHop cut the legs out from under the advertiser-supported broadcast television model," Richard Stone, an attorney at Jenner & Block LLP, representing Fox, wrote in the filing seeking a ban on the services before a trial. "Fewer viewers will see the commercials during Fox programs and the amount advertisers will be willing to pay for commercials inevitably will fall."
Dish's new service might even affect the TV networks' ability to borrow money, with AutoHop having "broad negative credit implications across the television industry," Neil Begley, an analyst for Moody's Investors Service, said in a May 25 report cited by Fox in its filing.
U.S. District Judge Laura Taylor Swain in Manhattan ruled July 10 that the copyright-infringement lawsuits will be tried in Los Angeles, where the three major TV networks sued. Breach of contract claims between Dish and the networks will be heard in New York, she said.
The networks are trying to stifle innovation, Dish said in its complaint. AutoHop "complies with Dish's bargained-for contractual rights," it said. Dish said it pays the networks "hundreds of millions of dollars per year in retransmission fees, collected from its subscriber base, for the right to rebroadcast these signals."
Comcast, also a cable operator, and DirecTV, a satellite TV company, are the largest U.S. pay-TV providers.