DIRECTV 2006 Annual Report Download - page 16

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THE DIRECTV GROUP, INC.
capability to offer up to 1,500 local HD channels as well as 150 national HD channels after the
successful launch of the DIRECTV 10 satellite in mid 2007 and the DIRECTV 11 satellite in
early 2008.
•High-Quality Digital Picture and Sound. Our 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. We have attained top rankings in customer satisfaction studies for our
industry. We believe 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. We believe our regulatory authorization to
use desirable orbital slots and broadcast spectrum helps sustain our 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. We
hold licenses to broadcast our services from 46 of these 96 DBS frequencies. The FCC is
currently considering licensing additional DBS slots for satellites that are sometimes referred to
as ‘‘tweeners’’ which would provide CONUS coverage. See ‘‘Government Regulation—FCC
Regulation Under the Communications Act’’ and ‘‘Risk Factors—The ability to maintain FCC
licenses and other regulatory approvals is critical to our business’’ for more information related
to these types of slots and satellites.
In addition, we hold licenses in three orbital slots (99west longitude, or WL, 101WL, and 103
WL) in the Ka-Band spectrum. The satellites that have been and will be launched into these
orbital slots will substantially increase our channel capacity, allowing us to introduce what we
expect to be the most HD programming across the United States. We also have obtained
approval from the FCC to transmit our signal in the Ku-Band from one of our satellites that has
been stationed at a leased orbital location at 72.5WL and from leased capacity on a satellite at
95WL.
Our satellite-based service provides us with many advantages over ground-based cable television
services. We have the ability to distribute hundreds of channels to millions of recipients
nationwide with minimal incremental infrastructure cost per additional subscriber. In addition, we
have comprehensive coverage to areas with low population density in the United States and the
ability to quickly introduce new services to a large number of subscribers.
Business Strategy
Our overall goal is to provide subscribers with the best television experience in the United States.
Our strategy focuses on offering subscribers differentiated and exclusive content, attaining leadership in
technology, and enhancing sales, marketing, distribution and customer service.
•Offer Differentiated and Exclusive Content. To fulfill our goal, we believe we must have the most
extensive collection of valuable programming services available. We plan on improving our
programming service by expanding HD programming, creating compelling new programming,
launching new interactive services and video-on-demand, or VOD, and expanding international
programming.
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