Dish Network 2015 Annual Report Download - page 79

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Pay-TV subscribers. DISH lost approximately 79,000 net Pay-TV subscribers during the year ended December 31,
2014, compared to the addition of approximately 1,000 net Pay-TV subscribers during the same period in 2013. The
decrease in net Pay-TV subscriber additions versus the same period in 2013 primarily resulted from lower gross new
Pay-TV subscriber activations and programming interruptions in connection with the scheduled expiration of certain
programming carriage contracts with several content providers.
During the year ended December 31, 2014, DISH activated approximately 2.601 million gross new Pay-TV subscribers
compared to approximately 2.666 million gross new Pay-TV subscribers during the same period in 2013, a decrease of
2.4%. Our gross new Pay-TV subscriber activations during 2014 were negatively impacted by programming
interruptions in connection with the scheduled expiration of certain programming carriage contracts with several content
providers. In addition, our gross new Pay-TV subscriber activations continue to be negatively impacted by increased
competitive pressures, including aggressive marketing, discounted promotional offers, and more aggressive retention
efforts.
Our Pay-TV churn rate for the year ended December 31, 2014 was 1.59% compared to 1.58% for the same period in
2013. Our Pay-TV churn rate continues to be adversely affected by increased competitive pressures, including
aggressive marketing and discounted promotional offers. Our Pay-TV churn rate is also impacted by, among other
things, the credit quality of previously acquired subscribers, our ability to consistently provide outstanding customer
service, price increases, programming interruptions in connection with the scheduled expiration of certain programming
carriage contracts with several content providers, our ability to control piracy and other forms of fraud, and the level of
our retention efforts.
Our gross new Pay-TV subscriber activations, net Pay-TV subscriber additions and Pay-TV churn rate have been
negatively impacted as a result of multiple programming interruptions and threatened programming interruptions in
connection with the scheduled expiration of programming carriage contracts with several content providers, including,
among others, Turner Networks, 21st Century Fox and certain local network affiliates. In particular, we suffered from
lower gross new Pay-TV subscriber activations, lower net Pay-TV subscriber additions and higher Pay-TV churn rate
beginning in the fourth quarter 2014 and continuing in the first quarter 2015, when, among others, certain programming
from 21st Century Fox, including Fox entertainment and news channels, was not available on our service. Although we
believe that the impact of the programming interruptions that occurred beginning in the fourth quarter 2014 and
continued in the first quarter 2015 has now subsided, we cannot predict with any certainty the impact to our gross new
Pay-TV subscriber activations, net Pay-TV subscriber additions and Pay-TV churn rate resulting from similar
programming interruptions that may occur in the future. As a result, we may at times suffer from periods of lower gross
new Pay-TV subscriber activations, lower net Pay-TV subscriber additions and higher Pay-TV churn rates as we did
beginning in the fourth quarter 2014 and continuing in the first quarter 2015.
Broadband subscribers. DISH gained approximately 141,000 net Broadband subscribers during the year ended
December 31, 2014 compared to the addition of approximately 253,000 net Broadband subscribers during the same
period in 2013. This decrease in net Broadband subscriber additions versus the same period in 2013 resulted from lower
gross new Broadband subscriber activations and a higher number of customer disconnects. During the years ended
December 31, 2014 and 2013, DISH activated approximately 295,000 and 343,000 gross new Broadband subscribers,
respectively. Gross new Broadband subscriber activations declined primarily due to stricter credit policies and satellite
capacity constraints in certain geographic areas. Customer disconnects were higher due to a larger Broadband subscriber
base during the year ended December 31, 2014 compared to the same period in 2013.
Subscriber-related revenue. “Subscriber-related revenue” totaled $14.495 billion for the year ended December 31,
2014, an increase of $730 million or 5.3% compared to the same period in 2013. The change in “Subscriber-related
revenue” from the same period in 2013 was primarily related to the increase in Pay-TV ARPU discussed below and
increased revenue from broadband services. Included in “Subscriber-related revenue” was $376 million and $221
million of revenue related to our broadband services for the years ended December 31, 2014 and 2013, respectively,
representing 2.6% and 1.6% of our total “Subscriber-related revenue,” respectively.