Dish's Charlie Ergen: Networks' Criticism of Ad-Skipping Service Is 'Disingenuous'

Charlie Ergen - House Hearing - 2001
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The chairman calls Auto Hopper "competitively necessary" amid the wider availability of free TV content online, which he says his kids rely on.

Dish Network chairman Charlie Ergen believes that his company's new ad-skipping feature that has drawn much criticism from TV networks is "competitively necessary" to respond to the wider availability of free or cheap Internet video, which threatens pay TV providers, he told the Wall Street Journal.

The typically media shy head of the satellite TV company used the rare interview to lay out his reasons for Dish's launch of ad-skipping service Auto Hopper last month, calling networks' complaints "disingenuous" as they have made TV shows available for free online on such sites as Hulu where shows carry fewer ads.

Emphasizing the threat of online video, Ergen said that four of his five children have stopped paying for a TV subscription, with his fifth living with the parents. About his daughter, he said she and her friends "come home and bring out their tablets" and look around online "until they find something free that they want to watch."

Several broadcast networks have sued Dish over the ad-skipping feature, but Ergen said they have been "more emotional than realistic." He argued that Auto Hopper could force networks to develop "more meaningful" ads, using demographic targeting and other strategies.

"Ultimately, broadcasters and advertisers have to change the way they do business or they run the risk of linear TV becoming obsolete," he said.

He also highlighted that Dish doesn't necessarily get a major benefit from ad skipping. Consumers may like ad skipping, "but it's not necessarily good for me and it's not necessarily good for the broadcaster, because I'm in the same ecosystem as him," Ergen said. "So we have to figure out how the broadcaster benefits, we benefit and the consumer continues to feel like he gets a fair deal."

One of his suggestions: maybe consumers should pays a little bit less for retransmission consent that broadcasters are charging pay TV firms.

Ergen, a former poker player known for being frugal, talked to the Journal at his company's Englewood, Colo., headquarters and his favorite pancake restaurant in the area where he ordered a half stack of buttermilk pancakes for $2.98, the paper said.

The Journal also highlighted that Ergen has several bottles of feng shui water in his office and says he has "feng shui-ed" all of Dish's satellite launches.

Twitter: @georgszalai