Dish Network 2008 Annual Report Download - page 27

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17
Item 1A. RISK FACTORS
The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties that
we are unaware of or that we currently believe to be immaterial also may become important factors that affect us.
If any of the following events occur, our business, financial condition or results of operations could be materially
and adversely affected.
Weakening economic conditions, including the recent downturn in financial markets and reduced consumer
spending, may adversely affect our ability to grow or maintain our business.
Our ability to grow or maintain our business may be adversely affected by weakening economic conditions,
including the effect of wavering consumer confidence, rising unemployment, tight credit markets, declines in
financial markets, falling home prices and other factors. In particular, the recent economic downturn could result in
the following:
x Fewer Subscriber Additions and Increased Churn. We could continue to face fewer gross subscriber
additions and increased churn due to, among other things: (i) the downturn in the housing market in the
United Stares combined with lower discretionary spending; (ii) increased price competition for our
products and services; and (iii) the potential loss of retailers, who generate a significant portion of our new
subscribers, because many of them are small businesses that are more susceptible to the negative effects of
a weak economy. In particular, subscriber churn may increase with respect to subscribers who purchase
our lower tier programming packages and who may be more sensitive to deteriorating economic conditions.
x Lower ARPU. Our ARPU could be negatively impacted by more aggressive introductory offers.
Furthermore, due to lower levels of disposable income, our customers may downgrade to lower cost
programming packages and elect not to purchase premium services or pay per view movies.
x Higher Subscriber Acquisition and Retention Costs. Our profits may be adversely affected by increased
subscriber acquisition and retention costs necessary to attract and retain subscribers in a more difficult
economic environment.
x Increased Impairment Charges. We may be more likely to incur impairment charges or losses related to
our debt and equity investments due to the significant deterioration of the overall debt and equity markets.
A prolonged downturn could further reduce the value of certain assets including, among other things,
satellites and FCC licenses, and thus increase the possibility of impairment charges related to these
investments as well.
If we do not improve our operational performance and customer satisfaction, our gross subscriber additions may
decrease and our subscriber churn may increase.
If we are unable to improve our operational performance and customer satisfaction, we may experience a decrease in
gross subscriber additions and an increase in churn, which could have a material adverse effect on our business,
financial condition and results of operations. In order to improve our operations, we have made and expect that we
will continue to make material investments in staffing, training, information technology systems, and other
initiatives, primarily in our call center and in-home service businesses. We cannot, however, be certain that our
increased spending will ultimately be successful in yielding operational improvements. In the meantime, we may
continue to incur higher costs as a result of both our operational inefficiencies and increased spending.