DIRECTV 2005 Annual Report Download - page 20

Download and view the complete annual report

Please find page 20 of the 2005 DIRECTV annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 146

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146

THE DIRECTV GROUP, INC.
DIRECTV U.S. introduced a new HD receiver and dish antenna that receives HD
programming from the Ka-Band orbital slots using MPEG-4 compression technology. In
2006, DIRECTV U.S. expects to introduce a combined HD-DVR capable of viewing and
recording HD programming from the Ka-Band orbital slots using MPEG-4 compression
technology.
•Introduce a Whole-House Entertainment Solution. Within the next year, DIRECTV U.S.
expects to introduce the DIRECTV home media center. This whole-house entertainment
solution will allow DIRECTV subscribers to access content, including digitally-recorded
video, digital photos and digital music, seamlessly from all television sets in a household.
The DIRECTV home media center will also provide DVR functionality throughout the
home and support HD and standard-definition video signals. In addition, DIRECTV U.S.
announced an agreement with Intel Corporation, or Intel, to enable remote viewing of
DIRECTV’s entertainment services and programming to PC screens, laptops, portable
media players and televisions through Intel↦ Viiv↩ technology later in 2006. DIRECTV
U.S. and Microsoft Corporation, or Microsoft, announced an agreement to develop new
opportunities to expand the reach of digital music, television and movies throughout the
home and to portable devices. Under the agreement, DIRECTV will work with Microsoft to
enable the flow of digital content between Windows PCs, DIRECTV’s set-top receivers,
PlaysForSure devices and the Xbox 360, allowing subscribers to experience DIRECTV
programming and digital content stored on their Windows PCs in a variety of new ways.
•Reduce Signal Theft. DIRECTV U.S. has undertaken and will continue to undertake
various initiatives with respect to its conditional access system to further enhance the
security of the DIRECTV signal. To help combat signal theft, DIRECTV U.S. is providing
its subscribers with more advanced access cards that it believes significantly enhance the
security of the DIRECTV signal. In addition, DIRECTV U.S. continues to seek out and
prosecute signal thieves with its own internal efforts and with the support of local, state and
federal law enforcement agencies. We have significantly reduced the theft of our signal in
recent years as a result of these initiatives.
•Enhance Sales and Marketing, Customer Service and Distribution. DIRECTV U.S. intends to
continue to grow its subscriber base and reduce churn by improving the credit quality of its
subscribers while also improving its customer service, distribution and marketing.
•Enhance Sales and Marketing. DIRECTV U.S. expects to achieve continued strong
subscriber growth through marketing programs that capitalize on the strength of the
DIRECTV brand. In addition, DIRECTV U.S. intends to have a greater emphasis on local
advertising and marketing to ensure that DIRECTV U.S.’ competitive strengths are
effectively targeted based on demographics and geography.
•Reduce High-Risk Subscribers. DIRECTV U.S. believes that in order to reduce churn, it
must improve the overall quality of its subscriber base by reducing the number of high-risk
subscribers that activate the DIRECTV service. Beginning in the second quarter of 2005,
DIRECTV U.S. implemented a stricter credit policy for new subscribers by requiring
high-risk subscribers (those that do not exceed certain minimum credit scores established by
DIRECTV U.S.) to pay DIRECTV U.S. between $150 and $200 before activating service.
DIRECTV U.S. intends to continue reviewing its credit screening policies to determine
whether future changes are appropriate to help ensure that the quality of its subscriber base
improves. For example, in January 2006, DIRECTV U.S. increased the upfront payments
for high-risk subscribers to between $200 and $300.
7