QUOTE AND NEWS
SeekingAlpha  Jul 18  Comment 
ByEquity Watch: DISH Network (NASDAQ:DISH) has been consistently delivering decent top-line growth and the trend is expected to continue in the future due to its promising growth initiatives. Despite the saturation of the U.S. Pay-TV Industry,...
Motley Fool  Jul 17  Comment 
The decision keeps the Dish Hopper online while paving the way for further court battles.
Wall Street Journal  Jul 15  Comment 
Philip Falcone's LightSquared has reached a deal on a restructuring plan that has the support of Dish Network Corp. Chairman Charlie Ergen, its top secured lender.
DailyFinance  Jul 14  Comment 
Today, the United States Court of Appeals for the Ninth Circuit affirmed a lower court’s September 2013 rejection of the Fox Broadcasting Company’s efforts to bar DISH subscribers from using two place-shifting features...
Market Intelligence Center  Jul 14  Comment 
DISH Network Corp (DISH) presents a trading opportunity that offers a 6.14% return in just 68 days. A covered call on Dish Network at the $65.00 level expiring on Sep. '14 offers an assigned return rate of 6.14% or 32.96% annualized. This trade...
USAToday.com  Jul 14  Comment 
Dish Network's Hopper gets victory in latest court decision
SeekingAlpha  Jul 11  Comment 
By Lennox Yieke: Dish Network (DISH) captured headlines in May, when it announced that it would start accepting payments in bitcoin. This is undoubtedly a shot in the arm for the digital currency, which had hitherto been struggling to shrug off...
Wall Street Journal  Jul 10  Comment 
Verizon CEO Lowell McAdam shot down the idea of buying Dish Network in a television interview, while providing a bullish outlook for its coming second-quarter results.
CNNMoney.com  Jul 10  Comment 
Mergers are all the rage in the telecom world, and Dish Network isn't happy about it.
New York Times  Jul 10  Comment 
Daniel M. Gitner stopped a perfect record in insider trading cases. | Harbinger Capital Partners files a lawsuit against Dish Network over LightSquared. | The job starts now for first-year junior bankers. | John Kerry may be this year's big guest...




 

DISH Networks (NASDAQ: DISH) is the third largest provider of paid-TV in the United States and has a customer base of approximately 14.133 million.[1] The industry faces challenges from traditional cable companies like Comcast, Cablevision, and Time Warner Cable which are not only much larger than their satellite competitors but also have the capacity to offer bundled services including phone and high speed Internet. As a result, cable companies generally receive significantly more revenue per subscriber per month (ARPU).

Dish customers have access to hundreds of video and audio channels, HD channels, international channels, state-of-the-art interactive TV applications, and award-winning HD and DVR technology. The Company provides programming, which includes more than 280 basic video channels, 60 Sirius Satellite Radio music channels, 30 movie channels, 35 regional and specialty sports channels, 2,500 local channels, 220 Latino and international channels, and 50 channels of pay-per-view content. As of December 31, 2009, the Company provided local channel coverage to markets covering about 97% of United States television households. In addition, it provided high definition (HD) local channels to markets representing approximately 93% of United States television households. [1]

Company Overview

Dish's programming content is delivered to programming centers by fiber or satellite and processed, compressed, encrypted and then uplinked to satellites for delivery to consumers. Dish subscribers receive programming via in-home equipment that includes a small satellite dish, digital set-top receivers, and remote controls. Some advanced receiver models feature DVRs, HD capability, and dual-tuners which allow independent viewing on two separate televisions. Some receiver models are Internet-protocol compatible which allows consumers to view movies and other content on their televisions via the Internet and a broadband connection.

Business Growth

FY 2010 (ended December 31, 2010)[2]

  • Net revenue increased 8.4% to $12.64 billion.
  • Net income increased 54.9% to $985 million.

Trends and Forces

Satellite companies have difficulty in competing with cable companies on the basis of bundling

The entire satellite television market is facing stiff competition from other companies that are able to bundle telephone services, high-speed internet, and entertainment into one package. This coupled with cable companies’ already stronger ability to provide local and other programming in a larger number of geographic areas makes it very difficult for DISH to expand their subscriber base and effectively compete. DISH has not been ignorant of these developments, and they partnered with AT&T to provide high speed internet services in certain markets. AT&T Inc. now offers DISH Network programming bundled with broadband, telephone and other services. However, AT&T and other telephone companies such as Verizon have begun laying high speed optic fiber lines that are capable of transmitting video services bundled with traditional phone and high speed internet directly to millions of homes, making them as much a competitor as a partner.

DISH faces significant legal exposure to two key legal issues

The first is its purported copyright infringement of TiVo (TIVO) by creating and selling its own digital video recorder (DVR). A Texas jury concluded DISH infringed on certain TiVo patents through the creation and distribution of their own DVR devices.[3]This was appealed and during January 2008, the U.S. Court of Appeals upheld the Texas jury verdict that certain of DISH’s DVRs, infringed a patent held by TiVo. DVR is an increasingly popular device, and if subsequent appeals are overturned, it would be a huge blow to DISH, who has thus far spent $128 million in legal fees. A total of $105 million was also given to TiVo in October 2008, when the Supreme Court denied Dish Network's request for Certiorari.[4]

The second legal issue confronting DISH is the expiration of the Cable Act in 2007. The Cable Act prohibits exclusive contracting practices with cable affiliated programmers, from which DISH purchases a large percentage of their programming. The Cable Act expired in September 2007, but was extended for another five-year period.[5] Cable companies have appealed the FCC’s decision, and this litigation is pending. The expiration of this act could adversely affect DISH’s ability to negotiate and obtain high quality television programming.

Satellites are risky business

Satellites are vulnerable to solar storms, and accidents in space that cannot be repaired. The satellites that DISH launches to broadcast have a 12-year lifespan, and spare solar arrays, but if 8 of the 104 solar arrays malfunction or breakdown then the entire satellite is offline. Launching a replacement is expensive, and has its own risks in takeoff. Certain launch vehicles that may be used by us have either unproven track records or have experienced launch failures in the past. Currently DISH has 12 satellites in orbit, of which 5 are owned by the company itself while the rest are leased from third parties.[6]

Competition

DISH faces competitors in the satellite television market and in the home entertainment sector at large. The DirecTV Group (DTV) is its main competitor in the satellite television market, and DirecTV has several advantages over DISH such as larger size and financial resources as well as greater penetration in the United States. DirecTV is sold in more electronic retailing stores than DISH, and as a result DISH must spend more on advertising to spread the word of its existence than DirecTV. DirecTV is also in the process of launching HDTV. DISH is also doing this but is behind DirecTV. However, both of these companies, and the satellite television market in general, face stiff competition from the firmly entrenched cable television providers. The resources, size, and bundling capabilities of these companies pose stiff competition to the satellite television market. [7]However, their key advantage at the moment is their greater HDTV penetration rates, and capabilities. If there is a shift in preferences of consumers to HDTV, then cable television providers are the best position to meet that demand.

Satellite Entertainment Competitors: These companies offer and provide satellite based entertainment to households.

  • DirecTV: DirecTV is a provider of digital television entertainment in the United States and Latin America. The Company operates two direct-to-home (DTH) operating segments: DIRECTV U.S. and DIRECTV Latin America.

Cable Television Competitors: These companies provide clients with the cable television. These are some of the larger providers of cable entertainment, but there are many local companies as well.

  • Time Warner Cable:Time Warner Cable Inc. (TWC) is a cable operator in the United States, with systems located mainly in five geographic areas: New York State (including New York City), the Carolinas, Ohio, southern California (including Los Angeles) and Texas. TWC offers video, high-speed data and voice services over its broadband cable systems to residential and commercial customers. In addition, TWC sells advertising to a variety of national, regional and local advertising customers.
  • Comcast: Comcast Corporation is a provider of video, high-speed Internet and phone services (cable services), offering a variety of entertainment, information and communications services to residential and commercial customers.



References

  1. 1.0 1.1 DISH 2010 10-K pg. 1  
  2. DISH 2010 10-K pg. 1  
  3. DISH 2009 10-Q1 pg. 46  
  4. DISH 2008 10-K pg. F52  
  5. DISH 2008 10-K pg. 13  
  6. DISH 2009 10-Q1 pg. 11  
  7. DISH Annual Report 2007, Item 1A, pg. 21
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