Dish Network 2002 Annual Report Download - page 5

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3
were previously obligated to purchase at a price of $22.47 per share, or approximately $2.7 billion. We also paid a
$600 million merger termination fee to Hughes.
Vivendi Universal. Effective December 23, 2002 we repurchased all of our outstanding Series D
Convertible Preferred Stock from Vivendi Universal. For more information please see Note 1 in Notes to the
Consolidated Financial Statements.
DISH NETWORK
Programming
Programming Packages. We use a “value-based” strategy in structuring the content and pricing of
programming packages available from the DISH Network. For example, we currently sell our entry-level
“America’s Top 50” programming package, which includes 50 of the most popular video channels, to consumers in
digital format for $24.99 per month. We estimate cable operators charge over $35 per month, on average, for their
entry-level expanded basic service that typically consists of approximately 55 analog channels, including local
channels. We believe that our “America’s Top 100” CD programming package, which we currently sell for $33.99
per month, also compares favorably to similar cable television programming. We believe that our “America’s Top
100” CD programming package is similar to an expanded basic cable package plus a digital music service. Based on
cable industry statistics, we estimate that cable operators would typically charge in excess of $45 per month for a
similar package, including local channels.
In addition to the above mentioned programming packages, we also offer our “America’s Top 150”
programming package for $42.99 per month and our “America’s Everything Pak”, which combines our “America’s
Top 150” programming package and all four premium movie packages, which are discussed below, for $74.99 per
month. For an additional $5.99 per month, we can add satellite-delivered local channels to any of the above
packages for consumers in 59 of the largest markets in the continental United States. Cable operators generally
include local channels in their programming packages at no additional charge. The use of spot-beam technology on
EchoStar VII and EchoStar VIII gives us the ability to increase the number of markets where we provide local
channels by satellite, but will reduce the number of channels that could otherwise be offered ubiquitously across the
United States.
Premium Movie Packages. We currently offer four premium movie packages which include up to 10
movie channels per package. Currently consumers can subscribe to a single premium movie package including 10
movie channels for only $11.99 per month. We believe we currently offer more premium movie channels than cable
typically offers at a comparable price.
International Programming. Currently, we offer more than 50 foreign-language channels including
Spanish, Arabic, French, Hindi, Russian, Chinese, and others. We also offer foreign-language programming
packages. For example, we believe that our “DISH Latino” package, which includes more than 20 Spanish-language
programming channels for $21.99 per month, is one of the most attractive Spanish-language packages available in
the United States. We also offer “DISH Latino Dos”, our bilingual programming package, which includes more than
20 English and more than 20 Spanish-language programming channels for $31.99 per month. In addition, during
January 2002, we introduced “DISH Latino Max”, which includes more than 60 English and more than 20 Spanish-
language programming channels for $41.99 per month. We believe we deliver some of the most popular foreign-
language programming to customers in the United States at superior values. We also believe foreign-language
programming is a valuable niche product that attracts a number of new subscribers who are unable to get similar
programming elsewhere.
Sales, Marketing and Distribution
Sales and Marketing. Independent distributors, retailers and consumer electronics stores currently sell
EchoStar receiver systems and solicit orders for DISH Network programming services. While we also sell receiver
systems and programming directly, independent retailers are responsible for most of our sales. These independent
retailers are primarily local retailers who specialize in TV and home entertainment systems. We also sell EchoStar
receiver systems through nationwide retailers such as Costco, Sears and Wal-Mart, and certain regional consumer