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Maybe Charlie Ergen Knows Something About Ads

By Swanni 

Washington, D.C. (July 3, 2012) -- Dish Chairman Charlie Ergen was mocked last week for saying that his company's new ad-zapping Auto Hop was launched partially to prevent kids from seeing commercials for junk food and alcohol. Cynics accused Ergen of trying to disguise the real reason for Auto Hop: to eliminate all network commercials to put pressure on the networks to lessen their demands for more money to carry their channels.

But a Wall Street analyst yesterday issued a report that would seem to support Ergen's contention that there's a market for parents who want their kids to watch shows without seeing the commercials.

Fortune Magazine reports that
Sanford C. Bernstein analyst Todd Juenger says many parents are subscribing to Netflix so their children can watch programming ad-free. The analyst conducted a focus group of 16 mothers and found that "content control, commercial avoidance and time management" were the top factors for choosing shows for their kids.

Unlike popular children's networks, such as Nickelodeon and Disney, Netflix's shows on streaming and disc do not include commercials.

The mothers also said they originally subscribed to Netflix for themselves, but now mostly use the service for their kids because of a "dwindling supply" of shows available for adults. (Netflix has been criticized for offering fewer new-run movies in recent months.)

Because of his findings, Juenger says Disney and Viacom, the owner of Nickelodeon, should demand more money from Netflix to carry its shows. He says commercials on their channels are becoming less valuable because more parents are choosing to avoid them by watching the shows on Netflix.


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