Businessmodel of DISH

Customer Segments

DISH provides a range of pay television and wireless broadband services to a range of customers. The Company principally services general consumers, with its customers categorised into two segments:

• Residential Customers, comprising general subscribers to the Company’s pay television and wireless broadband services; and
• Commercial Customers, comprising hotels, motels, bars, and other commercial businesses. DISH currently has around 13.9 million pay television subscribers. The Company, however, is reported to be losing subscribers at a considerable rate, with its pay television subscriber base falling by 281,000 in the second quarter of 2016, compared with a loss of 81,000 for the same period in 2015. The Company’s falling subscriber base is attributed to the rise of cheaper viewing alternatives, such as online streaming services.

DISH serves a customer base across the US in two regional segments: subscribers east of Chicago, and subscriber west of Chicago.

Value Propositions

DISH provides value to its customers in the following ways:

• Its competitive pricing structure, with the Company established as one of the leading low-cost pay television providers in the US, offering low everyday prices to consumers following the expiration of introductory promotions;
• Its range of integrated services, with the Company providing pay television, wireless broadband, and online streaming services that can be bundles together;
• Its high-quality customer service, with the Company providing a range of installation, customer support, and technical assistance to its customers throughout contract periods; and
• Its technology offerings, with the Company offering various local and national high definition programming, award winning DVRs systems, multiple tuner receivers, video on demand services, and external hard drives to its customers. ### Channels

DISH Network operates a website at www.dish.com, through which it provides information on its various services, channels, and support offerings. The Company also operates a customer portal named MyDISH, which allows customers to access billing information and manage their account settings.

DISH offers receiver systems and programming to its customers through its in-house direct sales force, which is organised regionally through a network of domestic offices. Its television services are distributed through its DISH and Sling-branded offerings, the latter of which includes on-demand and streaming services, established with a view to limiting the number of subscribers lost to leading streaming platforms.

A significant portion of DISH’s new subscribers are secured through independent third parties such as small satellite retailers, direct marketing groups, local and regional consumer electronics stores, nationwide retailers, and telecommunications companies. The Company pays these parties a mix of upfront and monthly incentives to solicit orders for its services and provide customer service. The Company also partners with telecommunications companies to bundle DISH branded programming with broadband and/or voice services on a single bill.

Customer Relationships

DISH operates an online customer portal through which it makes some services available on a self-service basis. This includes access to billing information, customer support functions, and account management settings, which customer can access without interacting directly with representatives of DISH’s sales and support staff.

The Company’s sales staff provide personal care to its customers. It offers a range of incentives to secure new subscribers, providing installation services and offering customer promotions. DISH similarly seeks to retain its customers by providing upgrades to equipment and receivers and by providing retention credits. DISH provides its services under fixed-term contracts.

DISH provides a range of support services to its customers. This includes 24-hour telephone customer service and technical support, as well as a range of online resources, such as FAQs and guides. The Company also operates several social networking accounts, including with Twitter and Facebook, through which it is able to interact directly with its customers.

Key Activities

DISH operates principally as a holding company. The Company and its subsidiaries are organised into two reportable business segments: DISH, which concerns the Company’s pay television services under the DISH and Sling brands, as well as bundled broadband and telephone services; and Wireless, which concerns the Company’s operation of wireless spectrum licences and related assets. The DISH branded pay television service consists of Federal Communications Commission licenses authorising it to use direct broadcast satellite and fixed satellite service spectrum, its owned and leased satellites, receiver systems, third-party broadcast operations, customer service facilities, a leased fiber optic network, in-home service and call centre operations, and certain other assets, while its Sling branded services comprise live, linear streaming over-the-top Internet-based domestic, international and Latino video programming services.

Key Partners

DISH works in conjunction with a range of organisations in the process of managing its networks and distributing its products and services. These partnerships include:

• Supplier and Vendor Partners, comprising suppliers of technologies, services, and tools, which help to support the Company’s distribution services;
• Distribution and Channel Partners, comprising a range of third-party resellers and affiliates – including local and nationwide retailers, telecommunications companies, independent sales agents, and electronics businesses – that help to extend the Company’s sales and marketing reach; and
• Strategic and Alliance Partners, including a range of companies and organisations with which the Company shares resources and collaborates on joint projects. DISH recently agreed a multi-year partnerships with Nielsen, under which Nielsen will incorporate set-top-box viewing data into its TV ratings system. The Company also has a partnership with comScore, which provides the Company with an internal system that the Company to measure programming performance.

Key Resources

DISH’s key resources are its formal Federal Communications Commission spectrum licences, its related satellite and wireless network infrastructure and properties, its IT and communications infrastructure, its various sales and distribution channels, its intellectual properties and brands, its partnerships, and its personnel.

DISH’s business operations depend on certain broadcast and satellite assets. This includes Federal Communications Commission licenses, a fixed satellite service spectrum, a number of owned and leased satellites, receiver systems, customer service facilities, a leased fiber optic network, in­home service and call centre operations, and certain other assets.

DISH owns a number of patents and trademarks. Searches of records published by the US Patent and Trademark Office identified numerous patent applications in Dish’s name, including applications entitled ‘Frame block comparison’, ‘Clamp device for mounting antenna to rail’ and ‘Apparatus and systems for mounting an electrical switching device’.

Cost Structure

DISH incurs costs in relation to the payment of licensing and professional fees, the operation and maintenance of its broadcast and satellite infrastructure – including leased properties and equipment, the maintenance of its IT and communications infrastructure, the implementation of marketing and advertising campaigns, the operation of its multiple sales and distribution channels, the management of its partnerships, and the retention of its personnel.

In 2015 DISH accrued total costs and expenses in the amount of $13.74 billion. The Company’s most significant costs relate to its subscriber-related expenses, which includes programming expenses, costs relating to its pay television and broadband services, in­home service and call centre operations, billing costs, refurbishment and repair costs, subscriber retention costs, and monthly wholesale fees paid to broadband providers.  The Company also accrues substantial expenses in relation to the payment of salaries and benefits to its workforce of 18,000 employees.

Revenue Streams

DISH principally generates revenue through the provision of providing pay television and broadband services to its base of subscribers. The Company also derives revenue from the collection of equipment rental fees and other hardware related fees, including fees for DVRs, fees for broadband equipment, equipment upgrade fees and additional outlet fees from subscribers with receivers with multiple tuners; advertising services; and fees earned from the provision in­home service operations.

In 2015 DISH generated annual revenue of $15.07 billion, up on the 14.64 billion recorded by the Company the previous year. The vast majority of the Company’s 2015 revenue was attributed to its subscriber-related revenues, which amounted to $14.95 billion, with equipment sales and other fees totalling 115.34 million for the year.