Television Distribution Rights, Net (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Television Distribution Rights [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of television distribution rights |
Television distribution rights consisted of the following:
Television Distribution Rights, Net
Television distribution rights consisted of the following:
The Company enters into affiliation agreements with television providers for carriage of the Company's shopping service, as well as for certain channel placement. If these television providers were to add additional subscribers to the agreement through acquisition, the Company may be required to make additional payments.
The Company's ability to continue to sell products to its customers is dependent on its ability to maintain and renew these affiliation agreements. In some cases, renewals are not agreed upon prior to the expiration of a given agreement while the programming continues to be carried by the relevant distributor without an effective agreement in place. The Company does not have distribution agreements with some of the cable operators that carry its programming.
Television distribution rights are amortized using the straight-line method over the lives of the individual agreements. The remaining weighted average lives of the television distribution rights was approximately 2.9 years at December 31, 2017. Amortization expense for television distribution rights was $157 million, $193 million and $189 million for the years ended December 31, 2017, 2016 and 2015, respectively.
The decrease in the gross presentation of television distribution rights and the related accumulated amortization at December 31, 2017 is primarily due to the end of the useful lives of television distribution rights in place at the time of Liberty's acquisition of QVC in 2003.
As of December 31, 2017, related amortization expense for each of the next five years ended December 31 was as follows (in millions):
In return for carrying QVC's signals, each programming distributor in the U.S. receives an allocated portion, based upon market share, of up to 5% of the net sales of merchandise sold via the television programs and from certain internet sales to customers located in the programming distributors' service areas. In Germany, Japan, the U.K., Italy and France, programming distributors predominately receive an agreed-upon annual fee, a monthly fee per subscriber regardless of the net sales, a variable percentage of net sales or some combination of the above arrangements. The Company recorded expense related to these commissions of $298 million for each of the years ended December 31, 2017 and 2016 and $293 million for the year ended December 31, 2015, which is included as part of operating expenses in the consolidated statements of operations.
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| Schedule of expected amortization expense |
As of December 31, 2017, related amortization expense for each of the next five years ended December 31 was as follows (in millions):
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