DIRECTV 2005 Annual Report Download - page 17

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THE DIRECTV GROUP, INC.
The receiving equipment consists of a small receiving satellite dish antenna, a digital set-top
receiver and a remote control, which we refer to as a DIRECTV↧ System. After acquiring and
installing a DIRECTV System, subscribers activate the DIRECTV service by calling DIRECTV U.S.
and subscribing to one of DIRECTV U.S.’ programming packages.
Key Strengths
DIRECTV U.S. is our principal business and is characterized by the following key strengths:
•Large Subscriber Base. DIRECTV U.S. is the largest provider of DTH digital television services
and the second largest MVPD provider in the United States, in each case based on the number
of subscribers. DIRECTV U.S. believes that its large subscriber base provides it with the
opportunity to obtain programming on favorable terms and secure unique and exclusive
programming. DIRECTV U.S. also believes that its large subscriber base contributes to
achieving other economies of scale in areas such as DIRECTV System equipment purchasing,
customer service, broadcast operations and general and administrative services.
•Leading Brand Name. Results from a study DIRECTV U.S. commissioned in 2005 indicated
that over 85% of consumers in the United States are aware of the DIRECTV service.
DIRECTV U.S. believes the strength of its brand is an important factor in its ability to attract
new subscribers. In addition, DIRECTV U.S. believes its recognized brand name enhances its
ability to secure strategic alliances with programmers, distributors and other technology and
service providers.
•Substantial Channel Capacity and Programming Content. As a result of its significant channel
capacity, DIRECTV U.S. believes it is able to deliver to its subscribers one of the widest
selections of local and national programming available today in the United States, including
exclusive programming such as the NFL SUNDAY TICKET package and international
programming such as the DIRECTV PARA TODOS↧ service, which is designed for Spanish-
speaking subscribers in the United States. In addition, DIRECTV U.S. has a substantial amount
of capacity in the Ka-Band spectrum that allows DIRECTV U.S. the capability to offer 1,500
local HD channels as well as 150 national HD channels after the successful launch of two
additional satellites in 2007.
•High-Quality Digital Picture and Sound. DIRECTV U.S.’ video and audio programming is 100%
digitally delivered, providing subscribers with digital-quality video and CD-quality sound. We
believe this compares favorably with cable providers that frequently offer popular programming
in an analog format and offer a limited selection of digital channels for an additional fee.
•Strong Customer Service. DIRECTV U.S. has attained top rankings in customer satisfaction
studies for its industry. DIRECTV U.S. believes that providing high-quality customer service is
an important element in minimizing subscriber disconnection, or churn, and attracting new
subscribers.
•Valuable Orbital Slots and Satellite-Based Technology. DIRECTV U.S. believes its regulatory
authorization to use desirable orbital slots and broadcast spectrum helps sustain its position as
one of the leading companies in the MVPD industry. The Federal Communications Commission,
or FCC, has designated three direct broadcast satellite, or DBS, orbital slots in the Ku-Band
spectrum that provide full coverage across the 48 contiguous states of the United States, often
referred to as CONUS coverage. Within these three orbital slots, there are 96 assigned DBS
frequencies. DIRECTV U.S. holds licenses to broadcast its services from 46 of these 96 DBS
frequencies.
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