Netflix now on Dish’s Hopper in first big pay-TV partnership

Subscribers to Dish’s satellite TV service can now access Netflix right from their set-top box, the companies announced on Wednesday. The partnership is a major strategic coup for the online video service, and reflects a new level of integration between online and traditional TV.

My colleague Janko Roettgers first reported last week that such deals were on the way.

According to a news release, [company]Netflix[/company] will now appear for all [company]Dish[/company] customers using a second-generation Hopper box, and will feature the same user interface as on other platforms:

“The app is easily accessible from any channel by clicking the blue button on the DISH remote and selecting the Netflix icon, or from the Netflix icon on the Hopper main menu.”

This is significant because, until now, Netflix users have had to switch to another input on their TV, or use another device to access the service. Netflix will now be available to millions of customers who want to access it through the same box where they get their existing TV.

The deal also represents a major marketing opportunity for Netflix. As Janko reported, Netflix has made pay-TV partnerships its major strategic goal for 2015. The Dish hook-up thus comes sooner than expected. AT&T, which is in the process of acquiring Direct TV, appeared to be the most likely initial candidate.

For Netflix, the Dish partnership is another step in its goal to achieve the broad reach of HBO — but at the same time not become too tied to the pay TV industry.

As Janko put it: “Netflix wants to be on your cable box you’ve learned to live with, but not part of the cable bundle you hate so much.”

CBS and Dish reach deal, but don’t include internet TV service

So much for that blackout: CBS and Dish announced a new multiyear distribution deal Saturday that brings the broadcaster’s programming back to the satellite TV operator. The agreement comes just hours after CBS as well as cable networks like Showtime and the CBS Sports Network went dark on Dish in 14 markets, including Los Angeles, San Francisco and New York.

The two companies didn’t reveal how much Dish has to pay CBS going forward, but they did announce a few other details of the deal: Dish customers will have access to Showtime Anytime, the TV Everywhere service that allows them to stream Showtime content to mobile and connected devices. Dish is also putting some significant restrictions on its controversial Hopper DVR, effectively disabling automatic ad skipping for the first week after a show aired on CBS. In return, CBS is dropping its lawsuit against the Hopper.

Notably absent from the agreement are any rights to include CBS in Dish’s upcoming Nutv streaming service, which aims to target cord cutters with a cheaper and smaller programming bundle. Dish previously won the rights to include Disney’s ABC network in the service, but it now looks like Nutv will come without CBS content when it launches in the coming weeks.

However, both parties apparently left the door open to add at least some CBS content to the service down the line. The agreement “includes a path to over-the-top distribution of Showtime Networks,” according to a joint press release.

Leading up to the agreement, Dish tried to blame the long and difficult negotiations on the high costs of the CBS Sports network. But this outcome suggests that internet rights were as much of an issue, and that CBS eventually had the upper hand, forcing Dish to give in before this weekend’s football games.

Why CBS went dark on Dish: it’s all about the internet

After weeks of threats, CBS followed through late Friday afternoon and took its stations off Dish Network. Dish subscribers in 14 markets around the country, including San Francisco, Los Angeles and New York, won’t be able to watch any more CBS programming until the two companies reach an agreement on a new contract.

The blackout not only cuts off popular [company]CBS[/company] shows like NCIS and the Big Bang Theory, but also the network’s sports coverage, including NFL and SEC football games. In some markets, viewers are also losing access to the CW network as well as Showtime.

A CBS spokesperson confirmed the blackout, sending out a statement that reads in part:

“What CBS seeks is appropriate compensation for the most-watched television network with the most popular content in the world, as well as terms that reflect the developing digital marketplace. We hope that we can reach an agreement very soon so we can all get back to the business of providing the best entertainment, news and sports to the Dish customers we both serve.”

Dish responded with a statement of its own:

“We are disappointed that CBS has chosen to black out their local channels, but remain optimistic that the channels will return quickly as both sides are continuing to work tonight to finalize an agreement.”

The move comes after months of contractual back-and-forth that largely mirrors the many retransmission and carriage fee fights we have seen in the past. On the surface, these fights always follow a very simple script: Broadcast and cable networks want more money in exchange for their programming, and pay TV operators aren’t willing to pay up. Both sides often try to enlist the public with on-air and online campaigns. Increasingly, the back-and-forth leads to blackouts, which inevitably result in the TV service operator giving in and agreeing to pay more.

But the dispute between CBS and [company]Dish[/company] is also a good example for why this isn’t just about corporate haggling. At the core, this dispute is all about the internet.

Dish wants more rights, CBS more dough

That’s in part because Dish doesn’t just want CBS to renew its contract for a few more years. The satellite TV operator also wants rights to carry CBS on its Nutv online TV service, which Dish intends to launch before the end of the year. Dish already has announced deals with Disney/ABC, Scripps and A&E networks, and it is likely going to get access to NBC’s programming thanks to the Comcast merger conditions.

Dish has said that it wants to target cord cutters with its online service, and the company is looking to compile an affordable bundle of live and on-demand programming for $30 to $40 per month. Dish was able to strike its Disney deal in part because it used its Hopper DVR as a bargaining chip, promising to curtail ad skipping and monetize recorded shows in exchange for access to online rights.

But it looks like CBS may not be playing ball. The broadcaster recently launched its own online video service called CBS All Access, which combines a live feed of its network with access to on-demand programming. CBS is charging All Access subscribers $5.99 a month. The network was getting just $0.54 per subscriber on average from TV service providers when it signed its last deal with Dish in early 2012, according to Reuters, and has reportedly been looking to bump this to $2 per subscriber in recent contract negotiations.

Advertisers and audiences are moving online

These significant price increases also have something to do with the internet, albeit on a different level. TV networks have been asking for more money for their channels partly because their other major revenue stream is starting to slow down. Advertisers have for some time been wary of TV viewers skipping over their ads with DVRs as well as moving away from traditional TV to new online services. Now, we are starting to see some of them shift their money away from TV and towards the internet as well.

This trend has become especially obvious this year, with companies like Time Warner and Comcast reporting ad revenue for their networks being flat, or in some cases even declining over the most recent quarter, according to a recent Wall Street Journal report. And big advertisers are getting more vocal about shifting priorities. Allstate, for example, plans to move 20 percent of its ad dollars from TV to the internet by 2015, which Journal cited as part of mounting evidence for a “structural slowdown.”

The irony is that advertisers don’t make these decisions in a vacuum; they’re just following their audience.

While internet usage, and even online video viewing, was long seen as complementary to traditional TV consumption, there are now signs that the time spent watching traditional TV is actually declining. Recent numbers from Nielsen show that Americans on average watched seven hours less traditional TV per month during the most recent quarter than a year ago.

So why would networks want more money for programming that is attracting fewer eyeballs, you might ask? One simple answer is: because they can – for now, anyway. Networks aren’t oblivious to the changing world around them, and they are trying to maximize their value while they’re the strongest. That means that we are likely going to see a lot more blackouts like these ones ahead.

For that, you can blame the internet. Or, you know, just go and watch something online.

This post was updated at 4:40pm with a statement from CBS, and at 7:15pm with a statement from Dish.

Dish supercharges its DVR with new apps and accessories

Dorky product names? Check. Features that will make broadcasters antsy? Check. Dish (S DISH) announced a number of updates to its Hopper DVR at CES in Las Vegas Monday, including a new extender called Super Joey that makes it possible to record up to eight shows at the same time on the DVR’s 2TB hard drive and mobile apps that offer the ability to transfer recorded files onto your iOS or Android device. Dish is also extending the Hopper with new apps for Playstation (S SNE) 3 and 4 as well as LG TVs, essentially offering multi-room DVR functionality without the need for additional boxes. It’s all not revolutionary, but should still keep Hopper users happy.

CBS takes aim at a rival, shoots CNET in the foot

The Hopper from Dish Network was a finalist in CNET’s “Best of CES” awards — until parent company CBS told the tech news-and-reviews site that it couldn’t include the company because CBS is suing it. How can readers trust CNET’s journalism after such a decision?

Hopper gets another $12M to organize the web’s travel data

Hopper’s multiyear mission to use big data tools to bring structure to the web’s travel-related information continues with a fresh infusion of cash. CEO Frederic Lalonde talked about how his company is taking advantage of acquisition-happy Google’s interest in travel information.