DISH Network serves up fare intended to whet everyone's appetite for televised entertainment. The #2 provider of satellite-based pay-TV in the US (behind DIRECTV), the company serves more than 14 million subscribers, which include business clients in such industries as hospitality, restaurant, and retail. Programming includes premium movies, SIRIUS radio, on-demand video service, regional and specialty sports, local and international channels, and pay-per-view in addition to basic video programming. It offers bundled voice and Internet services through partnerships with voice and data communications providers. DISH generates all of its sales in the US.
The company offers about 3,100 local channels, including standard definition channels in all US markets and HD channels in 190 of the some 210 national markets. It also carries 70 Sirius radio channels, 30 premium movie channels, 35 regional and specialty sports channels, 300 Latino and international channels, and 70 pay-per-view channels. Its DISH Anywhere service allows subscribers to watch more than 325,000 movies, TV shows, clips, and trailers online from personal computers, smartphones, and other mobile devices. Blockbuster@ Home provides streaming access to more than 10,000 movies and TV shows to DISH customers on their TVs and online access to more than 25,000 movies and TV shows by computer.
DISH provides its programming options via satellites that it owns or leases from satellite equipment and services provider EchoStar (spun off by DISH in 2008). The company distributes its programming from operations centers also owned by EchoStar. DISH subscribers access the service using a small satellite dish and digital set-top receivers.
Sales and Marketing
The company gains new subscribers through third parties, including national retailers and telecommunications firms, local and regional electronics stores, and small satellite retailers, among other channels. It cost more to acquire pay-TV customers in 2013, but average the customer paid more to DISH. The cost of acquiring a customer was $866 in 2013, up from $784 in 2012. The average pay-TV bill in 2013 was $80.37, up from $76.98 in 2012.
More customers meant more revenue for DISH in 2013. The number of broadband subscribers jumped 253,000 during the year, helping revenue to rise 5% to $13.9 billion compared to 2012. The company also posted a 150% increase in equipment sales and service to EchoStar in 2013 from 2012.
Net income increased 27% to $807 million in 2013 from 2012. DISH did not have to contend with $730 million in litigation expense that it has in 2012, when it reached a settlement with the Voom channels.
Driven by the rise in net income, DISH’s cash flow from operations climbed in 2013 to about $2.3 billion from $2 billion the previous year.
One of DISH's key strategies is product innovation. In 2012 it launched the Hopper set-top box, a high-definition DVR receiver that allows HD programming to be watched in multiple rooms, among other features. The following year Hopper was enhanced with Slingbox "placeshifting" technology, which allows viewers to watch TV programming anywhere they have Internet access.
Among recent efforts to expand its selection of programming, it signed a multi-year deal with the NBCUniversal-affiliated Universal Sports Network in 2012 to offer DISH subscribers access to coverage of Olympic qualifying, trials, and highlights, as well programming on a range of related sports, like swimming, track and field, skiing, and figure skating. DISH batted in another sports channel the previous year when it added the MLB Network to its lineup.
The company's primary strategy, however, is to move beyond satellite television -- to deliver television to consumers wherever they are (via smartphones, tablets, and other devices) and to expand into voice and data services. It is actively pursuing partnerships, acquisitions, and other opportunities to enable that expansion. As part of this strategy, over the past several years, DISH has been amassing wireless spectrum assets to build its own wireless network. In late 2012 the FCC approved the use of some of its spectrum for cell phone service, which vastly increases the value of spectrum that was previously reserved for satellite phone service.
DISH and Sprint agreed to team up to develop and deploy a fixed wireless broadband service. The service, being tested in Corpus Christi, Texas, will feature built-in high-gain antennas to receive the 4G TDD-LTE signal on Sprint’s 2.5 GHz spectrum. The plan is to roll the service out to other markets. The companies had previously been corporate combatants when DISH made a $25.5 billion unsolicited bid to buy Sprint.
While DISH has grown with its satellite- and wireless-based operations, it fared less well on terra firma. In late 2013, DISH discontinued operations of its Blockbuster subsidiary, which it had bought in 2011. The company shut down Blockbuster stores and ended the DVD-by-mail service because the Blockbuster unit could not support what it cost to run it. DISH continues to offer Blockbuster video streaming.
Mergers & Acquisitions
In 2012 DISH acquired satellite and wireless spectrum assets from DBSD North America (the operating subsidiary of ICO Global Communications) and TerreStar Networks (a subsidiary of TerreStar Corporation) for about $2.9 billion. The deals are part of DISH's strategy to build its own wireless service offering.