Dish Network 2015 Annual Report Download - page 40

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Furthermore, due to the lack of compatibility of our infrastructure with the set-top boxes of a provider other than
EchoStar, any transition to a new supplier of set-top boxes could take a significant period of time to complete, cause us
to incur significant costs and negatively affect our gross new subscriber activations and subscriber churn. For example,
the proprietary nature of the Slingbox “placeshifting” functionality and certain other technology used in EchoStar’s set-
top boxes may significantly limit our ability to obtain set-top boxes with the same or similar features from any other
provider of set-top boxes.
If we were to switch to another provider of set-top boxes, we may have to implement additional infrastructure to support
the set-top boxes purchased from such new provider, which could significantly increase our costs. In addition,
differences in, among other things, the user interface between set-top boxes provided by EchoStar and those of any other
provider could cause subscriber confusion, which could increase our costs and have a material adverse effect on our
gross new subscriber activations and subscriber churn. Furthermore, switching to a new provider of set-top boxes may
cause a reduction in our supply of set-top boxes and thus delay our ability to ship set-top boxes, which could have a
material adverse effect on our gross new subscriber activations and subscriber churn rate and cause related revenue to
decline.
Technology in the pay-TV industry changes rapidly, and our success may depend in part on our timely introduction
and implementation of, and effective investment in, new competitive products and services and more advanced
equipment, and our failure to do so could cause our products and services to become obsolete and could negatively
impact our business.
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.
Our operating results are dependent to a significant extent upon our ability to continue to introduce new products and
services and to upgrade existing products and services on a timely basis, and to reduce costs of our existing products and
services. We may not be able to successfully identify new product or service opportunities or develop and market these
opportunities in a timely or cost-effective manner. The research and development of new, technologically advanced
products is a complex and uncertain process requiring high levels of innovation and investment. The success of new
product and service development depends on many factors, including among others, the following:
x difficulties and delays in the development, production, timely completion, testing and marketing of products
and services;
x the cost of the products and services;
x proper identification of customer need and customer acceptance of products and services;
x the development of, approval of and compliance with industry standards;
x the amount of resources we must devote to the development of new technologies; and
x the ability to differentiate our products and services and compete with other companies in the same markets.
If the new technologies on which we 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.
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 DISH branded pay-TV 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. We may also be at a competitive disadvantage in developing and introducing complex new products and
services for our DISH branded pay-TV services because of the substantial costs we may incur in making these products
or services available across our installed base of subscribers. 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.