Dish Network won't back down on Hopper commercial skipper

ENGLEWOOD, Colo. -- The Dish Network satellite service got the big four television networks in a dither earlier this year by introducing new technology, called Auto Hop, that automatically zapped commercials from recordings of prime-time TV shows. Auto Hop is part of Dish's Hopper set-top box home DVR service that offers up to 2,000 hours of storage.

CBS, NBC Universal and Fox have responded with a copyright-infringement lawsuit, while Dish has its own lawsuit against the networks. But there's no turning back for Dish, Vice President Vivek Khemka told us on a recent visit to company headquarters, where he also showed us the latest technology in Dish's pursuit of pay-TV customers.

Dish serves 14 million subscribers who bring TV into their home via satellite. Larger rival DirecTV, the other major satellite TV service, has 20 million subscribers. Khemka hopes new tablet and smartphone apps enabling subscribers to watch TV anywhere will help stem customer churn, which is a persistent problem for the entire pay-TV industry. Khemka's comments, edited for space and clarity:

Q: Before we jump into the Auto Hop feature, tell us about TV watching on devices. How's that going?

A: While we focus on tablets and PCs and watching on the phone, 95% of viewing still happens in the home. As people acquire more tablets, as the tablet penetration goes up, people will want to watch more video on the tablet. It won't supplant the TV experience anytime soon. I look at my daughter, who is 7. She prefers to watch Cartoon Network on the tablet. As that generation grows up, there will be more of a shift.

Q: On the tablet, I can watch live TV with the NBC and ABC apps and many others as well. So why is it a big deal to have the Dish app to watch TV on the tablet?

A: You shouldn't have to go to different apps. We give you a full guide, and you can watch everything through that. You can record shows and watch them through the app, or at home. Few of our competitors offer live TV on the tablet. We offer you all the channels, no matter where you go (with the extra add-on Slingbox, which starts at $179.99).

Q: Can you Auto Hop on the tablet?

A: No. It doesn't work on live TV.

Q: What do you say to the networks who think you're evil?

A: Consumers have been forwarding through commercials since the beginning of the DVR. This just simplifies the process. The feedback from consumers is that they love it.

Q: So in the wake of the lawsuit, there's no turning back?

A: We are not holding back the Hopper. We're promoting and selling the Hopper today.

Q: There's a big trend in TV toward "social" viewing, via apps. What's your take on that?

A: TV was always about being social. "Did you see that cool show last night?" What we call the second-screen apps today can actually enhance search and discovery by what your friends are watching. We'll be launching something in that space soon.

Q: You made a big splash recently with the dedication of Blockbuster headquarters in Denver, which is right in the Dish lobby. It's been really sad watching Blockbuster whither away. You want to bring it back?

A: We want to revive the brand. Yes, the stores have declined, but we're at a stable number of stores now. We have a digital strategy, a store strategy and a DVD-by-mail strategy. We've come up with simple pricing — not the old pricing with eight price points. We are leveraging Blockbuster to enhance Dish and cross-promote each other. We have kiosks to demo the Hopper in the store.

Yes, video rentals are on the decline. … We see where the market is going, and we'll be changing accordingly. We will sell digital products in the future. Stay tuned.