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 about 14 million subscribers, which includes business clients in such industries as hospitality, restaurant, and retail. Programming includes premium movies, SIRIUS radio, on-demand video service augmented by its Blockbuster assets, 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 most of its sales in the US.
The company offers about 3,300 local channels, including standard definition channels in all US markets and HD channels in 170 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 DISHOnline.com 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 makes more than 100,000 titles, including movies, TV shows, and video games, available by mail and in-store exchange.
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.
The US is far and away the company's largest market, contributing about 97% of sales. The UK and Mexico account for most of the rest.
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.
DISH has seen consistent revenue growth over the past decade, including in 2012 when sales rose about 2% to $14.3 billion. It gained nearly 90,000 net new pay television subscribers that year (up from a loss of about 165,000 the prior year), primarily related to the marketing of its new Hopper set-top box. Although its churn rate improved slightly year-over-year, the company continues to feel competitive pressure from cable companies and other telecommunications firms.
DISH's Blockbuster segment, which accounts for less than 10% of sales, is showing positive revenue growth (up 12% in 2012), but it had an operating loss of $35 million that year.
Overall, net income was down 58% in 2012 to $637 million as subscriber-related expenses rose and the company incurred some $730 million in legal expenses related to its settlement with Voom (DISH was accused of breach of an affiliate agreement for dropping the high-definition channel network).
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.
Mergers & Acquisitions
Blockbuster was picked up in 2011 when DISH was the winning bidder in a hotly contested auction for the ailing video-rental behemoth's assets. DISH bought the company, which had been operating under Chapter 11 bankruptcy protection since 2010, in a transaction valued at around $320 million. DISH took possession of the video store operator's chain of more than 1,700 retail locations (down to 800 now), through which it sells DISH Network service subscriptions. Besides physical merchandise sales and rentals, Blockbuster's established online video streaming website also provides a boost to DISH's on-demand video service.
In early 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. In a bold move, the company made an unsolicited bid of $25.5 billion for Sprint Nextel in 2013.
Co-founder and chairman Charlie Ergen controls nearly 90% of the company.