Third party carriers transport QVC's packages from its distribution
centers to its customers. In each market where QVC operates, it has
negotiated long-term contracts with shipping companies, which in
certain circumstances provides for favorable shipping rates.
QVC operates in a rapidly evolving and highly competitive retail
business environment. QVC has numerous and varied competitors at
the national and local levels, ranging from large department stores
to specialty shops, e-commerce retailers, direct marketing
retailers, wholesale clubs, discount retailers, infomercial
retailers, and mail-order and catalog companies. Some of QVC’s
competitors, such as Amazon and Walmart, have a significantly
greater web-presence. QVC believes that the principal competitive
factors for its web-commerce operations are high-quality products,
brand recognition, selection, value, convenience, price, website
performance, customer service and accuracy of order shipment.
QVC believes that QxH is a leader in video shopping, e-commerce,
mobile commerce and social commerce by curating quality products at
outstanding values, providing exceptional customer service,
establishing favorable channel positioning and multiple touchpoints
across digital platforms and generating repeat business from its
core customer base and that it also compares favorably in terms of
sales to general, non-video based retailers due to its extensive
customer reach and efficient cost structure. QxH's closest video
shopping competitor is ShopHQ and QVC International operations face
similar competition in their respective markets, such as Jupiter
Shop Channel in Japan, HSE (formerly referred to as HSE 24) in
Germany, Austria, and Italy, and Ideal World in the U.K.
QVC also competes for access to customers and audience share with
other providers of broadcast, digital and hard copy entertainment
and content. The price and availability of other programming and
the conversion to digital programming platforms may unfavorably
affect the placement of its programming in the channel line-ups of
its distributors, and may affect its ability to obtain distribution
agreements with small cable distributors. Competition from other
programming also affects the compensation that must be paid to
distributors for carriage. Principal competitive factors for QVC
include (i) value, quality and selection of merchandise; (ii)
customer experience, including customer service and speed, cost and
reliability of fulfillment and delivery services; and (iii)
convenience and accessibility of sales channels.
QVC regards its tradenames, service marks, patents, copyrights,
domain names, trade dress, trade secrets, proprietary technologies
and similar intellectual property as critical to its success. QVC
relies on a combination of tradename, patent and copyright law,
trade-secret protection, and confidentiality and/or license
agreements with its employees, customers, suppliers, affiliates and
others to protect these proprietary rights. QVC has registered, or
applied for the registration of, a number of tradenames, service
marks, patents, copyrights and domain names through U.S. and
foreign governmental authorities and vigorously protects its
proprietary rights against infringement.
Domestically, QVC has registered tradenames and service marks
including, but not limited to its brand names and logo, "QVC,"
"Quality Value Convenience," "Find What You Love, Love What You
Find," the "Q Logo," and "Q" and tradenames for its proprietary
products sold such as "Arte D'Oro," "Cook's Essentials," "Denim
& Co.," "Diamonique," “Nature’s Code,” "Northern Nights" and
"Ultrafine Silver." Similarly, foreign registrations have
been obtained for many tradenames and service marks for its brand
names, logo and propriety products including, but not limited to,
"QVC," the "Q Logo," "Q," "Cook’s Essentials," "Denim & Co.,"
"Diamonique" and "Northern Nights."
HSN has numerous tradename registrations or pending applications in
the United States which help to expand HSN’s brand awareness.
These registrations and applications include the “HSN” brand
name and the “HSN logo” as well as registrations for HSN’s
proprietary products and services, including, but not limited to,
“HSN Shop By Remote,” “Technibond,” and “Concierge Collection.”
QVC considers the "QVC" and “HSN” names the most significant
tradenames and service marks it holds because of their impact on
market awareness across all of its geographic markets and on
customers' identification with QVC. As with all domestic tradenames
or service marks, QVC's tradename and service mark registrations in
the U.S. are for a ten