Dish Network 2011 Annual Report Download - page 108

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DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-14
DISH Segment
Revenue from our subscription television services is recognized when programming is broadcast to subscribers.
Payments received from 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 18 months to five years. Revenue from advertising sales is recognized when the related services are
performed.
Subscriber fees for equipment rental, including DVRs, additional outlets and fees for receivers with multiple tuners, and
our in-home service operations are recognized as revenue as earned. Revenue from equipment sales and equipment
upgrades are 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.
Blockbuster Segment
Rental revenue is generally recognized at the time of rental or sale. Rental revenue is generated from the rental of
movies and video games and any eventual sale of previously rented items.
Certain rental and subscription programs allow customers to rent a specified or unlimited number of titles during a
specific period. We recognize rental revenues from the sale of these programs and our online subscription service over
the term of the service.
We offer our customers the opportunity to download movies for a specific viewing period or permanently purchase a
movie from our web-site. 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 incurred in connection with our in-home service and call center operations, billing costs, refurbishment and repair
costs related to receiver systems, subscriber retention and other variable subscriber expenses. These costs are
recognized as the services are performed or as incurred.