Home Shopping Network 2015 Annual Report Download - page 5

3
HSNi is committed to providing customers with an evolving variety of quality products and from brands that resonate
with its customers. Products offered through HSN include jewelry, fashion (apparel & accessories), beauty & health (beauty,
wellness and fitness), and home & other (including home, electronics, culinary 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, in addition
to women and children's apparel, with the majority produced exclusively for its Cornerstone brands.
HSN
Overview
HSN includes the HSN television networks and other direct-response television marketing; its related website, HSN.com;
its mobile applications, a limited number of outlet stores and its wholesale distribution of certain proprietary products to other
retailers. The HSN television network broadcasts customer interactive 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. HSN’s programming
is intended to promote sales and customer loyalty through a combination of product quality, value and selection, coupled with
product information, entertainment and interactive experiences. Programming is divided into separately televised segments,
most of which have hosts who present and convey information regarding featured products, sometimes with the assistance of a
celebrity, industry expert, representative from the product vendor or someone retained to aid in the sale of the products. HSN
also produces entertainment such as live concerts to entertain and engage with customers and promote certain products.
HSN.com is a business-to-consumer digital 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. HSN provides
seamless experiences across all digital platforms and optimizes each unique platform by delivering exclusive content both at
HSN.com and on mobile phones and tablets, including the iPad, iPhone, Android and Windows devices. The HSN strategy is
to create immersive experiences, offer differentiated products and leverage technology to build seamless relationships with its
customers across all of its platforms. HSN fosters social communities as part of the HSN experience to encourage customers to
share their product finds, thoughts and reviews with their friends via Facebook, Twitter, Pinterest and Instagram.
Reach
HSN produces both live and recorded programming for the HSN television network primarily from its studios in
St. Petersburg, Florida, and distributes this programming by means of satellite uplink facilities, which it owns and operates, to a
satellite transponder which service is leased for a multi-year term. The satellite transponder agreement 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.
As of December 31, 2015 and 2014, the HSN's live broadcast reached approximately 93.7 million and 95.0 million
homes of the approximately 113.3 million and 113.8 million homes, respectively, in the United States with a television set.
Television households reached by the HSN television network as of December 31, 2015 and 2014 primarily include
approximately 63.5 million and 64.3 million households capable of receiving cable and/or telephone company ("Telco")
transmissions, respectively, and approximately 30.1 million and 30.7 million direct broadcast satellite system ("DBS")
households, respectively. As of December 31, 2015 and 2014, HSN2 reached approximately 49.8 million and 34.2 million
homes, respectively. Television households reached by HSN2 as of December 31, 2015 and 2014 primarily include
approximately 38.3 million and 22.1 million households capable of receiving cable and/or Telco transmissions, respectively,
and approximately 11.5 million and 12.1 million DBS households, respectively.
Pay Television Distribution
HSN has entered into distribution and affiliation agreements with cable television, Telco 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.
HSN’s larger pay television operators include Comcast, AT&T/DirecTV, Echostar/DISH and Time Warner Cable.