DIRECTV 2006 Annual Report Download - page 15

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THE DIRECTV GROUP, INC.
We believe we provide one of the most extensive collections of programming available in the
MVPD industry. We currently distribute to our subscribers more than 1,700 digital video and audio
channels, including about 185 basic entertainment channels including over 70 XM Satellite Radio music
channels, 31 premium movie channels, over 35 regional and specialty sports networks, an aggregate of
over 1,300 local channels, over 95 Spanish and other foreign language special interest channels, and
over 45 pay-per-view movie and event choices. Although we distribute over 1,300 local channels, a
subscriber generally receives only the local channels in the subscriber’s home market. As of
December 31, 2006, we provided local channel coverage in standard definition to approximately 142
markets, covering about 94% of U.S. television households.
In addition, as of December 31, 2006, we provided high definition, or HD, local channels in 49
markets representing 65% of U.S. TV households, as well as ten national HD television channels. With
the expected launch of two additional satellites, we expect to have the most HD capacity in the
industry.
We also provide premium professional and collegiate sports programming such as the NFL
SUNDAY TICKETpackage, which allows subscribers to view the biggest selection of NFL games
available each Sunday during the regular season. Under our contract with the NFL, we have exclusive
rights to provide this service through 2010, including rights to provide related HD, interactive and
mobile services.
To subscribe to the DIRECTVservice, subscribers acquire receiving equipment from either us,
our national retailers, independent satellite television retailers or dealers, or regional Bell operating
companies, or RBOCs. Most set-top receivers provided to new and existing subscribers are leased
subsequent to the introduction of a lease program on March 1, 2006.
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 DIRECTVSystem. After acquiring and
installing a DIRECTV System, subscribers activate the DIRECTV service by contacting us and
subscribing to one of our programming packages.
Key Strengths
•Large Subscriber Base. We are 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. We believe that our large subscriber base provides us with the opportunity to obtain
programming on favorable terms and secure unique and exclusive programming. We also believe
that our 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 we commissioned in 2006 indicated that over 92% of
consumers in the United States are aware of the DIRECTV service. We believe the strength of
our brand name is an important factor in our ability to attract new subscribers. In addition, we
believe our recognized brand name enhances our ability to secure strategic alliances with
programmers, distributors and other technology and service providers.
•Substantial Channel Capacity and Programming Content. As a result of our significant channel
capacity, we believe we are able to deliver to our 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. In addition, we
have a substantial amount of capacity in the Ka-Band spectrum that will provide us with the
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