Dish Network's new multi-room DVR, which comes complete with functionality allowing viewers to remove commercials from broadcast networks shows the day after they air, struck nothing short of terror in the heart of Moody's analyst Neil Begley on Friday. He offers a vision of the future that's downright dystopian in a research note that dares to imagine a world in which AutoHop--which three broadcast networks filed lawsuits over on Thursday--becomes ubiquitous ((shudder)).
Here's how Begley sees it: "Firstly, advertisers would lose a reliable source of branding and marketing for their products which is difficult to dependably replicate to mass audiences by other advertising means including the Internet."
The analyst believes decreased visibility for TV spots will prompt a withdrawal of marketing dollars from Madison Avenue. Drained of ad revenue, the TV channels would demand higher retransmission fees from the MSOs, who would inevitably force their customers to pay more for their multichannel bills. That would lead them to cancel their subscriptions in droves.
So when do the killer bees come?
But wait, there's more: Any ad-dependent channel that miraculously doesn't come under the thumb of AutoHop would face extinction. And all viewers "may choose to wait a day" to watch TV, which only compounds the negative impact on advertising.
But Hollywood does have some options before crumbling into the Pacific Ocean: "Networks can successfully saturate that programming with product placements...or make the advertisements more entertaining such that viewers opt not to skip them."
Oh, that's all the TV industry has to do? Time to stop intentionally making boring commercials, people!
Before Dish chairman Charlie Ergen unleashes the apocalypse, Begley might want to consider this will all end before it begins at a negotiating table. The TV nets will ease up on their retrans requests, for instance, or pay-TV subs will be able to pay extra to watch ad-free. But that might spoil the analyst's new career as a cross between Ken Auletta and Stephen King.