Disney: Skip our commercials, we cancel shows

CEO Robert Iger says using DVRs to jump ads hurts revenue and threatens the company's ability to fund 'Dancing with the Stars' and other popular programs.

By InvestorPlace May 24, 2012 11:52AM
Walt Disney Co. (DIS) doesn’t like the idea of viewers skipping commercials on its television stations, including ABC and ESPN. And "Dancing with the Stars" fans may not approve of the behavior, either, if push comes to shove.

Disney chairman and CEO Robert Iger spoke with FOX Business Network this week about a new technology from Dish Network (DISH) called  Auto Hop, which has a commercial-skipping feature.


The short of it was that if viewers don’t want to watch commercials, then Disney won’t be able to bankroll some of its biggest shows -- including the smash hit "Dancing with the Stars."


"We’re fortunate that in today’s world we can take programming and put it on new platforms and generate new forms of revenue, but when it comes to advertising, certainly for our television network, ABC, and for our local stations, it still represents the bulk of the revenue that they bring in," Iger said. "So supporting a great program like 'Dancing With The Stars' can only be done if you’ve got advertising. It’s critical that we not only make space for advertisers and sell it appropriately, but that audiences see those ads to support this great program."


In defense of Dish Network, you have to admire the company’s willingness to connect with what consumers actually want even if it makes some partners cranky. The reality is that many folks want to skip commercials and are already doing it with the available means, so DISH is just filling in the blanks. And bigger picture, DISH is in a tough spot trying to figure out how to compete with the emergence of streaming and mobile devices on one side, and conventional cable providers like Comcast (CMCSA) and Time Warner (TWX) on the other. An ambitious 10-year plan from DISH includes a vision of becoming a one-stop shop for internet, video and voice and taking the next step in emerging technologies is the only way to get there.


However, making programmers like Disney cranky -- or a host of other networks like NBC, which also weighed in against Auto Hop recently -- may not be beneficial in the long run. Quality programming doesn’t come cheap and everyone is struggling to figure out how to generate money in this new media world to support good programming.


Some shows are wildly popular because of their big budgets and production values, but the most popular shows are the ones that viewers are sometimes the least willing to suffer ads on. It’s quite the game of chicken.


Only time will tell who will blink first: The programmers like Disney, the providers like DISH or the consumers who have to endure the ads. But it’s clear that broadcasters like Disney, ABC and others aren’t going to let their ads disappear without a fight.


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694Comments
May 24, 2012 1:20PM
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You mean if I keep skipping commercials, they'll cancel some of their awful reality shows.  Keep it up everyone!!!
May 24, 2012 1:41PM
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So if I don't watch the commercials, they cancel Dancing with the stars.  What's the downside?  At least the commercials can be made entertaining with the home made Rifftrax treatment.

 

Disney, here's a tip.  Most of us aren't against advertising.  We're against saturation advertising.  I'll see the same ad a couple hundred times before it runs its course, sometimes twice in the same break.  You've reached me.  I know your product exists.  Go away now before you annoy me to the point of avoiding your product.  Burning you jingle into my brain isn't going to get me to buy something I didn't want the first 20 times I saw your commercial.

May 24, 2012 1:18PM
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Just get rid of Dancing With The Stars, instead.
May 24, 2012 1:36PM
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The viewer pays for these commercials. All advertising costs are passed onto the price the customer pays for the product that is being advertised -- all products. Companies do not pay for advertising, you do.

So, let's cut the crap and get right to the point. If the viewing audience (who are the consumers), are paying for advertising, and practically everybody hates their favorites shows and movies being interupted by some worthless piece of crap company, hawking products to displaced American workers by companies who soldout the American worker decades ago by exporting the jobs to China, by the companies that make these worthless piece of crap products , then somebody tell me how Disney has the balls to threaten anything on their viewers (customers) when Disney has already raised their advertising costs onto the price they charge to attend their parks. The increase this year alone was 8-percent -- in a down economy?

Worse is how advertising has invaded everything. You can't go to the movie theater without paying to watch commericals in advance of the previews, in advance of the movie. So the movie theater is making money off you and the company that buys time to run its ads in the theater. And has the price of a movie ticket gone down?

You cannot get on your computer without advertising popping up everwhere. And who is paying for DSL or the Broadband service? Not them. You are. So they are making money everywhere.

You cannot even watch TV or movies on you computer without HULU interrupting your program to shove somebody's product down your throat. You've paid these companies to view these programs. Guess who gets the benefit from advertising revenue -- HULU does. So, they are making money twice.

You cannot even rent a movie without having to watch imbedded advertising.

 

This was not always the case. Remember when cable TV first cameout in the 1970s promising 50-channels, and how the cable company said how you wouldn't have to put up with commercials? How long before that promise became a lie. A big freaking lie.

These companies that want to advertise, make them spend their advertising budgets paying a reasonalble wage to their employees. Make them make the things in America that they are selling in America.

 

This is again nothing but greed and avarice running amok. Disney has a lot of balls acting like a dictatorial business goon, telling us, the American consumer, their customer, what they will or will not do. I say ban Disney, and all Disney procucts, for a year and see how guickly they show some respect. Losers.

May 24, 2012 1:42PM
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How can you use the phrases "Dancing with the Stars" and "quality programming" in the same story ?  Someone needs to create a "moron network" and put all of the idiotic reality shows on it.

As for American Idol and the rest of it's genre, if I want to hear Karaoke singers, I'll go to a bar.

 

 

May 24, 2012 1:16PM
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I think this ad hop thing is the best.  It was an idea derived from Carl Sagan's CONTACT...where the bizillionaire invented "AD-Nix to turn down the volume on TV comercials.

 

We USED TO have free TV with lots of Ads...now we PAY to have to watch too many ads that shouldn't even be on pay TV.

 

NO sympathy for ad-waves...die advertizers!

May 24, 2012 4:31PM
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I'm already paying for the Goddamn cable/satellite so quit wasting my time with all the commercials.
May 24, 2012 12:59PM
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It doesn't matter if I can click on a button or just use fast forward to skip an advertisement.  Does Disney want to remove fast forward functionality also?
May 24, 2012 12:59PM
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Sorry TV networks, time to update your business model.  If you think people will go back to watching ads, you are sadly mistaken.  I don't have any ideas to renew your model, but I am not in the TV business...
May 24, 2012 1:15PM
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Waaaaaaaaaaaaaaa, *sniffle* waaaaaaaaaaaa, *sniffle* waaaaaaaaaa

 

Thats all I hear, new technology comes up and the powers that be don't adapt, so when its too late they cry about it. I loved this quote:

"Quality programming doesn’t come cheap and everyone is struggling to figure out how to generate money in this new media world to support good programming."

 

Half of all shows are reality shows, and those have such small budgets because they don't have to shell out the cash for quality actors like a Alec Baldwin or Jim Parsons to make the show work. They thrive off the "reality" posed in these shows and the drama that ensues all while raking in ridiculous amounts of money.

 

Instead of focusing on how much profit you can gouge in a quarter how about finding out how to make a better product/service with technology in the mix and adapt it to meet consumer desires. Technology isn't going to slow down anytime soon so these companies are going to have to adapt or someone else will and take their place.

May 25, 2012 7:15AM
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Back in the early 70's when "cable" came out there were no commercials!!! That was the whole point of "PAY TV" so you didn't have to watch the damn commercials! Everyone quickly signed on to get cable tv because they didn't want commercials!!!

I HATE commercials. I buy out of need or want for something, and when I have that need I then seek out some form of advertising for the product!!!

May 24, 2012 4:25PM
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I HATE Diseny. And this is coming from a guy who literally lives 10 mins away from Disneyland here in California. They have become a very greedy company. Just in the past week alone Disneyland has raised its ticket prices to $89 for admission for ONE PERSON. not inculding parking, food, etc......  and parking is about $20 alone. Its honestly not even a fun place to be like it used to be, granted im an adult now, there are going to be a lot of little kids out there who will not get the chance to experience Disneyland because it cost SO MUCH. other theme parks in the area are happy. trust me. knotts berry farm, which is down the street, is barely half the price with more rides for both the young and old.

May 24, 2012 1:35PM
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Go ahed Disney.  Cancel your shows, then.   Maybe we can then get someone else who will be more interested in providing quality shows (read:  NON REALITY) that American want to watch, that aren't spinoffs of American Idol (almost every "judging show that has 3-4 judges") or a spinoff of the voice (some new stupid upcoming dating show to parade sluts around on the stage wearing nothing making stupid sexual remakrs).   Yeah, that makes me want to just sit down and watch it.

 

Pathetic crap.  That is about 75% of the shows on TV.   Ever watched "The History Channel"?  How much of it is actually HISTORY programming?  Less than 5%.  Ever watched "The Discovery Channel"?  How much is Science programming?  Hardly ANY.

 

Cancel away Disney.  Most of us might even THANK you for getting the crap off the air.  You run informercials on weekends and during overnight, which is a 30 minute COMMERCIAL.  Why don't you balance THAT out with a 30 minute commerical free QUALITY programming?

May 24, 2012 3:54PM
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Wow! There is actually something else on tv. Not just commercials?

I remember a time, long ago, when you wouldn't take a bathroom break during a commercial for fear of missing part of the show.
Now I have time to go to the lumber yard, remodel the bathroom, and make a snack before the commercials end.
The up side is I don't watch much tv anymore and I read more books.

May 24, 2012 1:17PM
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Disney is threatening us with dancing with the stars? what a joke. If they can't adapt let them go the way of the dinosaur. I pulled the plug on cable over 5 yrs. ago and haven't seen a commercial since. all this stuff can be doadloaded or streamed from the internet. we went to a web-site called graboid.com. they put it all together for you commercial free. $15 a month. you can see all the network stuff, showtime, hbo, you name it. usually within a few days after it airs. sometimes the day after. I could easily live without dancing with the former celebrities. when will these corporate entities start figuring out where their monies come from?
May 24, 2012 10:54PM
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Not all that many years ago there was NBC CBS and ABC, for all practical purposes. They were free, no monthly fee and ads paid for this. Now you pay to bring mostly garbage into your home and still have to deal with ads. A LOT more ads. I love it when multi billion dollar companies whine and threaten. I might lose my Snookie? How ever shall I survive? Shut off the tube and pick up a book and tell Disney to take a hike!
May 24, 2012 1:22PM
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Dancing with a what?   too funny... they hate that we have control. Hahahahahaha
May 24, 2012 4:02PM
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Earth to Disney:  using the mute button, going to the bathroom, talking to someone, and changing the channel are all good ways to not view/hear commercials too.
May 24, 2012 3:13PM
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this whole article is a joke.

i haven't watched a commercial in God knows how long.

i record everything then watch it later.  you can watch a typical half hour show in 20 mns, an hr show in 35-40mns and a typical 2 hr movie (cable or network) in around 90 mns.

most network shows have about 3-4 mns of commercials every commercial break; cable that grows to 4-5 mns.  since now that i have directv...i just hit the ffw button the number of times...and viola, the show is back....

if they think for one minute half or over half the population "likes" commercials, they need to go check in somewhere and get their heads examined!

May 24, 2012 2:04PM
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DWTS is retarded inthe first place.  Besides, who are these supossed stars?  Get Brad Pitt, or Natalie Portman on there.  Bristol Palin is far from a star.  Neither is Ochostinko.  Sorry for the references' as those were the only two I really rember being on there from the few times my wife watched.

Likewise, F-you Disney.  I pay damn good money to skip your commercials. If you don't agree with it, go after Time Warner for some of the hard earned cash I give them to skip your ads.  Not to mention, 8 to 10 minutes of ads in a 30 minute program is ridiculous.  Moreso in your movies that start with 3 minute interruptions and ramp up to eight minutes by the end of the program.
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