DIRECTV 2006 Annual Report Download - page 18

THE DIRECTV GROUP, INC.
recorders, or DVRs, and HD equipment, a whole-house entertainment solution, and portable
devices.
•Enhance DVR and HD Equipment. A cornerstone of our strategy is to use set-top receivers
that incorporate DVR and HD technology. In 2005, we introduced our own DVR, the
DIRECTV Plus DVR, that provides subscribers with advanced features including interactive
services and increased storage capacity. In late 2005, we introduced a new HD receiver and
dish antenna and in 2006 we introduced a combined HD-DVR, all with the capability to
receive HD programming from the Ka-Band orbital slots using MPEG-4 compression
technology. We expect to continue introducing DVR and HD receivers with industry-leading
features and functionality.
•Introduce Whole-House and Portable Services. We believe that it is important for our
subscribers to have multiple ways to access DIRECTV programming throughout the home
and on devices other than the TV. In 2007, we expect to introduce a service that allows
subscribers with the DIRECTV Plus HD-DVR to access applications such as pictures and
music from their personal computer that is equipped with the Intel Viiv software. Also in
2007, we expect to rollout small portable devices, such as DIRECTV Sat-Go and handheld
devices, that will enable remote viewing of DIRECTV’s programming and services. We also
expect to introduce a home media center in 2008 that will provide HD and standard-
definition DVR functionality throughout the home and allow customers to access stored
content, including video, photos and music, seamlessly from any connected television set in a
household.
•Enhance Sales and Marketing, Customer Service, Distribution and Installation. We intend to
continue to grow our subscriber base and reduce churn by enhancing our sales and marketing,
improving the credit quality of our subscriber base, and improving our customer service,
distribution and installation.
•Enhance Sales and Marketing. We expect to continue growing our subscriber base through
marketing programs that capitalize on the strength of our brand and extensive programming.
Beginning in the second half of 2007, we expect that our expanded HD programming will
increase sales from customers purchasing HD programming packages. We also intend to
have a greater emphasis on local advertising and marketing to ensure that our competitive
strengths are effectively targeted based on demographics and geography.
•Reduce Churn and High-Risk Subscribers. We believe that in order to achieve further
reductions in churn, we must continue to improve the overall quality of our subscriber base
by implementing additional credit and identification screening policies and reviewing these
on an ongoing basis to determine whether future changes are appropriate to help ensure
that the quality of our subscriber base continues to improve. Another important factor in
reducing churn is to continue increasing the penetration levels of customers purchasing HD
and DVR services.
•Improve Customer Service, Distribution and Installation. We expect to attain ongoing
improvements in customer service, distribution and installation services by continuing to take
a greater role in these functions. For example, we have assumed greater control of our
subscribers’ experiences by opening four owned and operated customer call centers. In
addition, we have increased our direct sales from 25% of total gross subscriber additions in
2005 to 34% in 2006. We have also significantly increased the number of in-home visits
performed by our Home Services Providers (HSPs) from 57% in 2003 to approximately 90%
in 2006. The HSP network is comprised of approximately 16,000 installers and technicians
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