Dish Network 2009 Annual Report Download - page 14

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4
x Wireless Mobile Video. We also expect to face increasing competition from wireless telecommunications
providers who offer mobile video offerings. We expect mobile video offerings will likely become more
prevalent in the marketplace as wireless telecommunications providers implement the fourth generation of
wireless communications.
Acquisition of New Subscribers
We incur significant upfront costs to acquire subscribers, including advertising, retailer incentives, equipment and
installation. In addition, customer promotions to acquire new subscribers result in less revenue to us over the
promotional period. While we attempt to recoup these upfront costs over the lives of their subscription, there can be
no assurance that we will. We deploy business rules such as credit requirements and contractual commitments, and
we strive to provide outstanding customer service, to increase the likelihood of customers keeping their DISH
Network service over longer periods of time. Our subscriber acquisition costs may vary significantly from period to
period.
Advertising. We use print, radio, television and Internet media, on a local and national basis to motivate potential
subscribers to call DISH Network, visit our website or contact independent third party retailers.
Retailer Incentives. We pay retailers an upfront incentive for each new subscriber they bring to DISH Network and,
for certain retailers, we pay small monthly incentives for up to 60 months provided, among other things, the
customer continuously subscribes to qualified programming.
Equipment. We incur significant upfront costs to provide our new subscribers with in-home equipment, including
advanced HD and DVR receivers, which most of our new subscribers lease from us. While we seek to recoup such
upfront equipment costs mostly through monthly fees, there can be no assurance that we will be successful in
achieving that objective. In addition, upon deactivation of a subscriber we may refurbish and redeploy their
equipment which lowers future upfront costs. However, our ability to capitalize on these cost savings may be
limited as technological advances and consumer demand for new features may render the returned equipment
obsolete.
Installation. We incur significant upfront costs to install satellite dishes and receivers in the homes of our new
customers.
New Customer Promotions. We often offer free programming and/or promotional pricing during introductory
periods for new subscribers. While such promotional activities have an economic cost and reduce our subscriber-
related revenue, they are not included in our definitions of subscriber acquisition costs or the SAC metric.
Customer Retention
We incur significant costs to retain our existing customers, mostly by upgrading their equipment to HD and DVR
receivers. As with our subscriber acquisition costs, our retention spending includes the cost of equipment and
installation. In certain circumstances, we also offer free programming and/or promotional pricing for limited
periods for existing customers in exchange for a contractual commitment. A component of our retention efforts
includes the installation of equipment for customers who move. Our subscriber retention costs may vary
significantly from period to period.
Customer Service
Customer Service Centers. We use both internally-operated and outsourced customer service centers to handle calls
from prospective and existing customers. We strive to answer customer calls promptly and to resolve issues
effectively on the first call. We intend to better use the Internet and other applications to provide our customers with
more self-service capabilities over time.
Installation and Other In-Home Service Operations. High-quality installations, upgrades, and in-home repairs are
critical to providing good customer service. Such in-home service is performed by both DISH Network employees
and a network of independent contractors and includes, among other things, priority technical support, replacement
equipment, cabling and power surge repairs for a monthly fee (“Service Plan”).