Newsflash: People Don’t Like Ads

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When consumers have choice they're sometimes going to make choices that some people don't like. They might even--gasp--try to limit the number of ads they're exposed to.

On personal computers people have a choice of browsers, and the ability to customize them with various plug-ins and extensions. Plus, the open nature of the web means that it's easy to change the presentation of content on websites in various ways. An Internet user might run Firefox with the Greasemonkey extension to change the appearance and behavior of different websites. For example, there's a Greasemonkey script that will reorder your Netflix queue according to various criteria, and one that changes the appearance of Amazon.com. Apple's Safari has a "Reader" feature that makes websites more legible by removing clutter and improving their typography, and services like Readability (on whose code Safari's Reader was built, incidentally) and Instapaper allow people to save webpages to reader later.

Ad-blocking technologies are definitely the most controversial result of giving users choice. Ad-blocking plugins are available for every major browser, and some people have started campaigns against the practice, calling it a form of "theft." Some "read later" services have also found themselves enmeshed in controversy.

While I can understand why sites that support themselves through advertising might be nervous about the practice of ad-blocking I don't think it's an issue of public concern. Ad-blocking is not illegal and it shouldn't be. Millions of people use ad-blocking services because there's a clear demand for them, and there's no way to stop the practice without micro-regulating the technologies consumers use to access content. And to think that ad-blocking somehow threatens the availability of content seriously underestimates the creativity of producers.

This brings me to Dish Network's new "Hopper" product. This is a technology that records all of primetime network TV and lets you watch shows without commercial interruptions after they've aired, and it's been a hot topic of discussion at this year's Cable Show. Broadcasters have predictably freaked out about this. Les Moonves, CEO of CBS has said, flat out, "They just can't do it. It's illegal." Many industry observers have drawn an analogy to ReplayTV, a company whose DVR had a "commercial advance" feature and that was driven to bankruptcy by protracted litigation by the broadcast industry. (There never was an actual judgment on the merits of the broadcasters' claims.) Some think that a lawsuit against Dish is just a matter of time.

Apart from the fact that I think such a suit would have no legal merit, I think one be a bad idea for several reasons. First, what would such a suit actually accomplish? Viewers already skip commercials on recorded shows. Every major DVR has a "30 second skip" feature. All that Hopper does is save people a few button presses. Second, if broadcasters insist on making people watch commercials even on recorded shows, they'll just switch to other platforms. Dish is just responding to consumer demand. Over time, they'll take their eyeballs elsewhere, to services like Netflix that have no commercials, if Dish can't satisfy their demand. Finally, it just doesn't make tactical sense. There are other ways for broadcasters to protect their revenue. For example, Dish already has to pay retransmission fees to broadcasters. Why can't the broadcasters can simply try to get Dish to pay them more, if they're really so concerned about lost revenue? And if the San Francisco Giants can play at "AT&T Park," maybe we can bring back shows like Ronald Reagan's General Electric Theater. I'm not in a position to endorse any of these approaches, but I can say that broadcasters' business models should adapt to consumer demand and new technologies; holding back the tide simply won't work.

As consumers find more ways to consume video outside the traditional pay TV model, and as pay TV providers (especially more competitive ones like Dish) try to keep up with evolving consumer preferences, undoubtedly ad-supported business models will have to adapt to viewer behavior. Media companies should start thinking about the future instead of just griping to the press.

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