DIRECTV 2002 Annual Report Download - page 18

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HUGHES ELECTRONICS CORPORATION
Subscribers of multiple set-top receivers typically subscribe to DIRECTV’s service longer and provide
higher ARPU. DIRECTV plans to continue to offer consumer promotions, loyalty programs and dealer
programs in an effort to improve overall subscriber retention.
Programming and Enhanced Services. As of December 31, 2002, DIRECTV distributed
approximately 800 digital-quality channels of programming, including about 125 basic entertainment
channels, 31 premium movie channels, over 20 regional and specialty sports networks, an aggregate
of over 530 local channels, over 35 Spanish and Chinese language special interest channels, and up
to 55 pay-per-view movie and event choices. DIRECTV also offers more than 30 digital music channels
for its customers.
As of December 31, 2002, DIRECTV offered local channels in 51 major metropolitan markets,
which included approximately 72 million, or 67% of U.S. television households. DIRECTV expects to
launch DIRECTV 7S in the fourth quarter of 2003. Assuming a successful launch of DIRECTV 7S,
DIRECTV expects to provide local channel coverage to approximately 100 markets representing
approximately 90 million, or 84%, of U.S. television households.
DIRECTV also provides premium sports and other premium programming such as THE NFL
SUNDAY TICKET, which allows subscribers, subject to local restrictions, to view as many as
14 National Football League games played each Sunday during the regular season. DIRECTV is the
exclusive DBS provider of THE NFL SUNDAY TICKET. In December 2002, DIRECTV announced a
five-year agreement with the NFL for the exclusive DBS television rights to NFL SUNDAY TICKET
through 2007 and the exclusive multi-channel television rights through 2005. The agreement with the
NFL will allow DIRECTV to distribute expanded programming to its NFL SUNDAY TICKET subscribers,
including the NFL CHANNEL on DIRECTV. The agreement will also allow DIRECTV to provide its NFL
SUNDAY TICKET subscribers who have the appropriate set-top receiver equipment with exclusive
enhanced technical innovations, which may include high-definition telecasts, viewer-selected cameras
and replays and other advanced digital technology. Hughes believes that DIRECTV’s increased
channel offerings and large subscriber base provide DIRECTV with a competitive advantage in
acquiring subscribers and obtaining programming from leading content providers on favorable terms.
DIRECTV U.S. provides Spanish language programming through its DIRECTV PARA TODOS
service. This service was launched nationwide during the first quarter of 2000. DIRECTV PARA
TODOS currently provides programming packages that provide more than 30 Spanish language
special interest channels with up to 115 English language channels, including CNN en Espanol,
UniVision, GalaVision, TV Chile and other special interest channels. In addition, DIRECTV has a
dedicated Spanish-speaking customer call center for subscribers of this service.
DIRECTV has introduced enhanced TV and interactive service offerings by partnering with other
leading companies. The current offerings include:
•High-Definition Channels. DIRECTV was the first MVPD provider to deliver high-definition
television, or HDTV, programming. DIRECTV currently delivers four HDTV channels including
programming from Home Box Office (HBO East channel), Showtime (Showtime’s East Coast
SHOWTIME HDTV channel), HDNET (the only all-HDTV national network) and a pay-per-view
channel featuring movies from New Line Cinema, Dreamworks and MGM. In addition,
DIRECTV expects to offer high-definition telecasts of professional football games as early as
the 2003 NFL regular season to its NFL SUNDAY TICKET subscribers. An HDTV-enabled
receiver and television is required to receive HDTV programming.
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