Dish Network 2012 Annual Report Download - page 7

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to be viewed in HD in multiple rooms. We recently introduced the Hopper set-top box with Sling, which
promotes a suite of integrated products designed to maximize the convenience and ease of watching TV
anytime and anywhere, which we refer to as DISH Anywhere™ that utilizes, among other things, online
access and Slingbox “placeshifting” technology. In addition, the Hopper with Sling has several innovative
features which allows customers to watch and record television programming through certain tablet
computers and combines program-discovery tools, social media engagement and remote-control
capabilities through the use of certain tablet computers.
x Outstanding Customer Service. We strive to provide outstanding customer service by improving the
quality of the initial installation of subscriber equipment, improving the reliability of our equipment, better
educating our customers about our products and services, and resolving customer problems promptly and
effectively when they arise.
x Great Value. We have historically been viewed as the low-cost provider in the pay-TV industry in the U.S.
because we seek to offer the lowest everyday prices available to consumers after introductory promotions
expire.
Programming. We provide programming that includes more than: (i) 270 basic video channels, (ii) 70 Sirius
Satellite Radio music channels, (iii) 30 premium movie channels, (iv) 35 regional and specialty sports channels, (v)
3,300 standard definition and HD local channels, (vi) 300 Latino and international channels, and (vii) 70 channels of
pay-per-view content. Although we distribute over 3,300 local channels, a subscriber typically may only receive the
local channels available in the subscriber’s home market. As of December 31, 2012, we provided local channels in
standard definition in all 210 TV markets in the U.S. and local channels in HD in more than 170 markets in the U.S.,
serving approximately 97% of TV households.
Receiver Systems. Our subscribers receive programming via equipment that includes a small satellite dish, digital
set-top receivers, and remote controls. Some of our advanced receiver models feature DVRs, HD capability,
multiple tuners (which allow independent viewing on separate televisions) and Internet-protocol compatibility
(which allows consumers to view movies and other content on their televisions via the Internet and a broadband
connection). We rely on EchoStar to design and manufacture all of our new receivers and certain related
components. See “Item 1A – Risk Factors.”
Blockbuster. On April 26, 2011, we completed the Blockbuster Acquisition. Blockbuster primarily offers movies
and video games for sale and rental through multiple distribution channels such as retail stores, by-mail, digital
devices, the blockbuster.com website and the BLOCKBUSTER On Demand service. The Blockbuster Acquisition
is intended to complement our core business of delivering high-quality video entertainment to consumers.
Blockbuster@Home. Blockbuster@HomeTM gives DISH subscribers access to more than 100,000 DVD movies, TV
shows and games by mail with unlimited in-store exchanges, streaming access to more than 10,000 movies and TV
shows via their TV and online access to more than 25,000 movies and TV shows via their computer.
dishNET. On September 27, 2012, we began marketing our satellite broadband service under the dishNET brand.
This service leverages advanced technology and high-powered satellites launched by Hughes and ViaSat to provide
broadband coverage nationwide. This service primarily targets approximately 15 million rural residents that are
underserved, or unserved, by wireline broadband, and provides download speeds of up to 10 megabits of data per
second (“Mbps”). We lease the customer premise equipment to subscribers and generally pay Hughes and ViaSat a
wholesale rate per subscriber on a monthly basis. Currently, we generally utilize our existing DISH distribution
channels under similar incentive arrangements as our pay-TV business to acquire new broadband subscribers.
In addition to the dishNET branded satellite broadband service, we also offer wireline voice and broadband services
under the dishNET brand as a competitive local exchange carrier to consumers living in a 14-state region (Arizona,
Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah,
Washington and Wyoming). Our dishNET branded wireline broadband service provides download speeds of up to
20 Mbps.
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We primarily bundle our dishNET branded services with our DISH branded pay-TV service, to offer customers a
single bill, payment and customer service option, which includes a discount for bundled services. In addition, we
market and sell our dishNET branded services on a stand-alone basis.
DISHOnline.com. DISHOnline.com gives DISH subscribers the ability to watch television programs, movies, and
clips online at no additional charge with their paid subscription to qualifying programming and compatible
equipment. DISHOnline.com offers more than 325,000 movies, television shows, clips and trailers.
DISH Anywhere (formerly DISH Remote Access). DISH Anywhere gives subscribers the ability to remotely
control certain features of their DVRs as well as view live TV and DVR recordings (with required compatible
hardware) using the DISH Anywhere application on compatible devices such as smartphones and tablets, or on
laptops and home computers by accessing dishanywhere.com.
Content Delivery
Digital Broadcast Operations Centers. The principal digital broadcast operations facilities we use are EchoStar’s
facilities located in Cheyenne, Wyoming and Gilbert, Arizona. We also use four regional digital broadcast
operations facilities and four micro digital broadcast operations facilities owned and operated by EchoStar that allow
us to maximize the use of the spot beam capabilities of certain owned and leased satellites. Programming content is
delivered to these facilities by fiber or satellite and processed, compressed, encrypted and then uplinked to satellites
for delivery to consumers. EchoStar provides certain broadcast services to us, including teleport services such as
transmission and downlinking, channel origination services, and channel management services pursuant to a
broadcast agreement ending on December 31, 2016. See Note 20 in the Notes to our Consolidated Financial
Statements in Item 15 of this Annual Report on Form 10-K for further discussion of our Related Party Transactions
with EchoStar.
Satellites. Our DISH programming is primarily delivered to customers using satellites that operate in the “Ku” band
portion of the microwave radio spectrum. The Ku-band is divided into two spectrum segments. The portion of the
Ku-band that allows the use of higher power satellites ̛ 12.2 to 12.7 GHz over the United States ̛ is known as the
Broadcast Satellite Service band, which is also referred to as the Direct Broadcast Satellite (“DBS”) band. The
portion of the Ku-band that utilizes lower power satellites ̛ 11.7 to 12.2 GHz over the United States ̛ is known as
the Fixed Satellite Service (“FSS”) band.
Most of our programming is currently delivered using DBS satellites. To accommodate more bandwidth-intensive
HD programming and other needs, we continue to explore opportunities to expand our satellite capacity through the
acquisition of new spectrum, the launching of more technologically advanced satellites, and the more efficient use of
existing spectrum via, among other things, better modulation and compression technologies.
We own or lease capacity on 15 DBS satellites in geostationary orbit approximately 22,300 miles above the equator.
For further information concerning these satellites and satellite anomalies, please see the table and discussion under
“Satellites” below.
Conditional Access System. Our conditional access system secures our programming content using encryption so
that only authorized customers can access our programming. We use microchips embedded in credit card-sized
access cards, called “smart cards,” or security chips in our receiver systems to control access to authorized
programming content (“Security Access Devices”).
Our signal encryption has been compromised in the past and may be compromised in the future even though we
continue to respond with significant investment in security measures, such as Security Access Device replacement
programs and updates in security software, that are intended to make signal theft more difficult. It has been our
prior experience that security measures may only be effective for short periods of time or not at all and that we
remain susceptible to additional signal theft. During 2009, we completed the replacement of our Security Access
Devices and re-secured our system. We expect additional future replacements of these devices will be necessary to
keep our system secure. We cannot ensure that we will be successful in reducing or controlling theft of our
programming content and we may incur additional costs in the future if our system’s security is compromised.