Dish Network 2013 Annual Report Download - page 36

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We may be required to make substantial additional investments to maintain competitive programming offerings.
We believe that the availability and extent of HD programming and other value-added services such as access to
video via smartphones and tablets continues to be a significant factor in consumers’ choice among pay-TV
providers. Other pay-TV providers may have more successfully marketed and promoted their HD programming
packages and value-added services and may also be better equipped and have greater resources to increase their HD
offerings and value-added services to respond to increasing consumer demand. In addition, even though it remains a
small portion of the market, consumer demand for 3D televisions and programming, as well as higher resolution
programming, will likely increase in the future. We may be required to make substantial additional investments in
infrastructure to respond to competitive pressure to deliver enhanced programming, and other value-added services,
and there can be no assurance that we will be able to compete effectively with offerings from other pay-TV
providers.
Any failure or inadequacy of our information technology infrastructure could disrupt or harm our business.
The capacity, reliability and security of our information technology hardware and software infrastructure (including
our billing systems) are important to the operation of our current business, which would suffer in the event of system
failures or cyber attacks. Likewise, our ability to expand and update our information technology infrastructure in
response to our growth and changing needs is important to the continued implementation of our new service offering
initiatives. Our inability to expand or upgrade our technology infrastructure could have adverse consequences,
which could include the delayed implementation of new service offerings, service or billing interruptions, and the
diversion of development resources. For example, during 2011, we implemented new interactive voice response and
in-home appointment scheduling systems. We also implemented a new billing system as well as new sales and
customer care systems in the first quarter 2012. We are relying on third parties for developing key components of
these systems and ongoing service after their implementation. Third parties may experience errors, cyber attacks or
disruptions that could adversely impact us and over which we may have limited control. Interruption and/or failure
of any of these new systems could disrupt our operations and damage our reputation thus adversely impacting our
ability to provide our services, retain our current subscribers and attract new subscribers.
In addition, although we take protective measures and endeavor to modify them as circumstances warrant, our
information technology hardware and software infrastructure may be vulnerable to cyber attacks including, among
other things, unauthorized access, misuse, computer viruses or other malicious code, computer denial of service
attacks and other events that could have a security impact. If one or more of such events occur, this potentially
could jeopardize our customer and other information processed and stored in, and transmitted through, our
information technology hardware and software infrastructure, or otherwise cause interruptions or malfunctions in
our operations, which could result in significant losses or reputational damage. We may be required to expend
significant additional resources to modify our protective measures or to investigate and remediate vulnerabilities or
other exposures, and we may be subject to litigation and financial losses.
We currently depend on EchoStar and its subsidiaries, to design, develop and manufacture all of our new set-top
boxes and certain related components, to provide a majority of our transponder capacity, and to provide digital
broadcast operations and other services to us. Our business would be adversely affected if EchoStar ceases to
provide these products and services to us and we are unable to obtain suitable replacement products and services
from third parties.
EchoStar is our sole supplier of digital set-top boxes and digital broadcast operations. In addition, EchoStar
provides a majority of our transponder capacity and is a key supplier of related services to us. We purchase digital
set-top boxes from EchoStar pursuant to a contract that expires on December 31, 2014. We have an option, but not
the obligation, to extend this contract for one additional year. EchoStar provides digital broadcast operations to us
pursuant to a contract that expires on December 31, 2016. EchoStar has no obligation to supply digital set-top boxes
or digital broadcast operations to us after these dates. We may be unable to renew agreements for digital set-top
boxes or digital broadcast operations with EchoStar on acceptable terms or at all. Equipment, transponder leasing
and digital broadcast operation costs may increase beyond our current expectations. EchoStar’s inability to develop
and produce, or our inability to obtain, equipment with the latest technology, or our inability to obtain transponder