DIRECTV 2006 Annual Report Download - page 23

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THE DIRECTV GROUP, INC.
•Large Subscriber Base and Pan-Regional Scale of Service. On a regional basis, we are the largest
provider of pay television services in Latin America. We believe that this scale provides us with
the opportunity to obtain programming on favorable terms, and contributes to economies of scale
in other areas, such as customer service, equipment and technology purchasing and broadcast
operations. We believe that this scale gives us a competitive advantage.
•Relationship with DIRECTV U.S. We believe that DTVLA’s relationship with DIRECTV U.S. is
a key strength. Sky Brazil, PanAmericana and Sky Mexico are in the process of aligning their set
top box specifications and middleware technologies with those of DIRECTV U.S., allowing them
to take advantage of DIRECTV U.S.’s economies of scale. We believe it will also allow DTVLA
to launch new features and services at a lower cost and on a faster timetable than its competitors
in Latin America.
•Leading Brands. The process of combining the DIRECTV and SKY businesses in Latin
America allowed us to select the strongest of the two brands in each of the three Latin American
territories. In addition, the national scale of our operations in each individual country enhances
our ability to leverage a strong brand across each market.
•Strong Customer Service. We believe that we have a higher level of customer service than our
competitors, and that this is an important element in minimizing subscriber churn and attracting
new subscribers.
Business Strategy
Our goal is to provide subscribers with the best television experience available to them. Our
strategy focuses on leveraging our competitive advantages that differentiate our service offerings from
those of our competitors.
•Unique Content. We expect that we can leverage our greater scale to offer unique and
compelling content to subscribers. Through the 2008-2009 season Sky Brazil, Sky Mexico and
PanAmericana have licensed exclusive rights to the Spanish soccer league, which in most
countries is the second most popular soccer league, after the local country leagues. As a result,
our service is the only one that allows subscribers to see all of the Spanish league games. In
addition, we have participated in creating an exclusive golf channel for Latin America, in an
effort to provide programming that is highly attractive to an important customer niche.
•DVR. A key aspect of our strategy is to use the availability of high quality, reasonably priced
DVRs as a cornerstone to distinguish our service from that of our competitors. Generally
speaking, DVRs are not prevalent in Latin America. We believe that our technology and
pan-regional scale, as well as the relationship with DIRECTV U.S., can be leveraged to provide
DVRs that will be more functional and less costly than those our competitors may introduce. In
2007, PanAmericana has begun to launch DVRs in its territories of operation, and Sky Brazil is
also launching a new DVR that will improve on a prior model that was previously distributed in
limited numbers.
•Enhanced Programming Features. We believe that we can differentiate our service from our
competitors through the use of enhanced features such as interactivity. For example, we offered
interactive services for matches from the 2006 World Cup of Soccer.
Infrastructure
We provide services in PanAmericana and Brazil from leased transponders on two satellites. Sky
Mexico provides its services from leased transponders on a separate satellite. Currently, none of these
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