Dish Network 2011 Annual Report Download - page 34

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24
24
If our products and services, including without limitation, our new whole-home HD DVR entertainment system
featuring the Hopper, are not competitive or do not work properly, our business could suffer and our financial
performance could be negatively impacted. If the quality of our products and services do not meet our customers’
expectations or our products are found to be defective, then our sales and revenues, and ultimately our reputation,
could be negatively impacted.
Technology in our industry changes rapidly and our inability to offer new subscribers and upgrade existing
subscribers with more advanced equipment could cause our products and services to become obsolete.
Technology in the pay-TV industry changes rapidly as new technologies are developed, which could cause our
products and services to become obsolete. We and our suppliers may not be able to keep pace with technological
developments. If the new technologies on which we intend to focus our research and development investments fail
to achieve acceptance in the marketplace, our competitive position could be negatively impacted causing a reduction
in our revenues and earnings. We may also be at a competitive disadvantage in developing and introducing complex
new products and services because of the substantial costs we may incur in making these products or services
available across our installed base of approximately 14 million subscribers. For example, our competitors could use
proprietary technologies that are perceived by the market as being superior. Further, after we have incurred
substantial costs, one or more of the products or services under our development, or under development by one or
more of our strategic partners, could become obsolete prior to it being widely adopted.
In addition, our competitive position depends in part on our ability to offer new subscribers and upgrade existing
subscribers with more advanced equipment, such as receivers with DVR and HD technology and by otherwise
making additional infrastructure investments, such as those related to our information technology and call centers.
Furthermore, the continued demand for HD programming continues to require investments in additional satellite
capacity. We may not be able to pass on to our subscribers the entire cost of these upgrades and infrastructure
investments.
New technologies could also create new competitors for us. For instance, we face increasing consumer demand for
the delivery of digital video services via the Internet, including providing what we refer to as “TV Everywhere.”
We expect to continue to face increased threats from companies who use the Internet to deliver digital video services
as the speed and quality of broadband and wireless networks continues to improve.
Technological innovation is important to our success and depends, to a significant degree, on the work of technically
skilled employees. We rely on EchoStar to design and develop set-top boxes with advanced features and
functionality and solutions for providing digital video services via the Internet. If EchoStar is unable to attract and
retain appropriately technically skilled employees, our competitive position could be materially and adversely
affected. In addition, delays in the delivery of components or other unforeseen problems associated with our
technology may occur that could materially and adversely affect our ability to generate revenue, offer new products
and services and remain competitive.
We rely on a single vendor or a limited number of vendors to provide certain key products or services to us such
as information technology support, billing systems, and security access devices, and the inability of these key
vendors to meet our needs could have a material adverse effect on our business.
Historically, we have contracted with a single vendor or a limited number of vendors to provide certain key products
or services to us such as information technology support, billing systems, and security access devices. If these
vendors are unable to meet our needs because they fail to perform adequately, are no longer in business, are
experiencing shortages or discontinue a certain product or service we need, our business, financial position and
results of operations may be adversely affected. While alternative sources for these products and services exist, we
may not be able to develop these alternative sources quickly and cost-effectively which could materially impair our
ability to timely deliver our products to our subscribers or operate our business. Furthermore, our vendors may
request changes in pricing, payment terms or other contractual obligations between the parties, which could cause us
to make substantial additional investments.