Dish Network 2015 Annual Report Download - page 121

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-17
Revenue Recognition
We recognize revenue when an arrangement exists, prices are determinable, collectability is reasonably assured and
the goods or services have been delivered.
Revenue from our Pay-TV services are recognized when programming is broadcast to subscribers. We recognize
revenue from our broadband services when the service is provided. Payments received from Pay-TV and Broadband
subscribers in advance of the broadcast or service period are recorded as “Deferred revenue and other” in our
Consolidated Balance Sheets until earned.
For certain of our promotions, subscribers are charged an upfront fee. A portion of these fees may be deferred and
recognized over the estimated subscriber life for new subscribers or the estimated remaining life for existing
subscribers ranging from four to five years. Revenue from advertising sales is recognized when the related services
are performed.
Subscriber fees for DISH branded pay-TV equipment rental fees and other hardware related fees, including fees for
DVRs, fees for broadband equipment and additional outlet fees, advertising services and fees earned from our in-
home service operations are recognized as revenue as earned. Generally, revenue from equipment sales and
equipment upgrades is recognized upon shipment to customers.
Certain of our existing and new subscriber promotions include programming discounts. Programming revenues are
recorded as earned at the discounted monthly rate charged to the subscriber.
We offer our customers the opportunity to download movies for a specific viewing period or permanently purchase a
movie from our website. We recognize revenue when the movie is successfully downloaded by the customer,
which, based on our current technology, occurs at the time the customer plays the movie for the first time.
Subscriber-Related Expenses
The cost of television programming distribution rights is generally incurred on a per subscriber basis and various
upfront carriage payments are recognized when the related programming is distributed to subscribers. Long-term
flat rate programming contracts are charged to expense using the straight-line method over the term of the
agreement. The cost of television programming rights to distribute live sporting events for a season or tournament is
charged to expense using the straight-line method over the course of the season or tournament.
“Subscriber-related expenses” in the Consolidated Statements of Operations and Comprehensive Income (Loss)
principally include programming expenses, costs for Pay-TV and broadband services incurred in connection with
our in-home service and call center operations, billing costs, refurbishment and repair costs related to DBS receiver
systems and broadband equipment, subscriber retention, other variable subscriber expenses and monthly wholesale
fees paid to broadband providers. These costs are recognized as the services are performed or as incurred. The cost
of broadband services is expensed monthly and generally incurred on a per subscriber basis.
Subscriber Acquisition Costs
Subscriber acquisition costs in our Consolidated Statements of Operations and Comprehensive Income (Loss)
consist of costs incurred to acquire new Pay-TV and Broadband subscribers through independent third parties and
our direct sales distribution channel. Subscriber acquisition costs include the following line items from our
Consolidated Statements of Operations and Comprehensive Income (Loss):
x “Cost of sales — subscriber promotion subsidies” includes the cost of our DBS receiver systems sold to
independent retailers and other distributors of our equipment and DBS receiver systems sold directly by us
to DISH branded pay-TV subscribers.