Home Shopping Network 2011 Annual Report Download - page 5

Download and view the complete annual report

Please find page 5 of the 2011 Home Shopping Network annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 84

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84

HSNi is committed to providing an evolving variety of quality products at reasonable prices and from
brands that resonate with its customers. Products offered through HSN include jewelry, fashion (apparel &
accessories), beauty & wellness, and home & other (including housewares, home fashions, electronics, culinary,
fitness and other). Featured products include proprietary label products and third party-branded products, some of
which are produced exclusively for HSN, as well as merchandise generally available through other retailers.
Cornerstone primarily offers home and outdoor furnishings and casual and leisure apparel with the majority
produced exclusively for Cornerstone.
HSN
Overview
HSN includes the HSN television networks; its related website, HSN.com; its mobile applications and a
limited number of outlet stores. The HSN television network broadcasts live, customer interactive television
home shopping programming 24 hours a day, seven days a week. HSN2, which debuted in August 2010, is a
network that primarily distributes taped programming on a limited distribution basis. HSN’s programming is
intended to promote sales and customer loyalty through a combination of product quality, value and selection,
coupled with product information and entertainment. Programming is divided into separately televised segments,
each of which has a host who presents and conveys information regarding featured products, sometimes with the
assistance of a representative from the product vendor or someone that we retain to aid in the sale of the
products. HSN.com is a business-to-consumer internet commerce site that sells all of the merchandise offered on
the HSN television networks, together with complementary products and select merchandise sold exclusively on
HSN.com. The HSN strategy continues to focus on defining a clear and differentiated brand and creating an
identity for itself as a lifestyle, editorial, programmed commerce network that provides great products with
innovative and engaging presentations.
Reach
HSN produces live programming for the HSN television network from its studios in St. Petersburg, Florida,
and distributes this programming by means of satellite uplink facilities, which it owns and operates, to two
transponders (one for the high definition feed and the other for the standard definition feed) on the same satellite.
The satellite transponders are leased on a full-time basis; one satellite transponder is leased through July 2013
and the other is leased through May 2019. Each satellite transponder lease provides for continued carriage of the
HSN television networks on a replacement transponder and/or replacement satellite, as applicable, in the event of
a failure of the transponder and/or satellite. HSN has also designed business continuity and disaster recovery
plans to ensure its continued satellite transmission capability on a temporary basis in the event of inclement
weather or a natural or other disaster.
As of December 31, 2011 and 2010, the HSN television networks reached approximately 95.5 million and
95.9 million homes, respectively, of the approximately 114.6 million and 115.9 million homes, respectively, in
the United States with a television set. Television households reached by the HSN television networks as of
December 31, 2011 and 2010 primarily include approximately 64.8 million and 65.5 million households capable
of receiving cable and/or broadcast transmissions, respectively, and approximately 30.8 million and 30.4 million
direct broadcast satellite system, or DBS, households, respectively.
Pay Television Distribution
HSN has entered into multi-year distribution and affiliation agreements with cable television and DBS
operators, collectively referred to in this document as pay television operators, in the United States to carry the
HSN television networks, as well as to promote the networks by carrying related commercials and distributing
related marketing materials to their respective subscriber bases. HSN currently has contracts with many local and
national pay television operators to distribute HSN television programming. Some of HSN’s larger pay television
operators include Comcast, DirecTV, Echostar/DISH and Time Warner.
3