DIRECTV 2006 Annual Report Download - page 9

competition and become the undisputed
leader in the rapidly growing market for
HD television. We will accomplish this by
launching two additional satellites over the
next year. With the launch of DIRECTV 10
in the middle of 2007, we expect to have
the most comprehensive HD programming
in the country with up to 100 channels by
year end. And with the launch of the sec-
ond satellite, DIRECTV 11, we’ll expand to
150 national and 1,500 local HD channels.
This will be a source of signifi cant advan-
tage to us, considering that the number
of homes with HD televisions is expected
to double from 2006 to 2007, and double
again by 2010. The marriage of HD and
sports fi ts perfectly with our brand and
goal to extend DIRECTV’s video leadership.
We will also build upon the exciting
programming introduced last year such
as the NFL SUNDAY TICKET™ enhance-
ments, YES Interactive and the U.S. Open.
For example, in early 2007 we redefi ned
the NASCAR viewing experience when
we launched NASCAR HotPass™ which fea-
tures fi ve individual driver channels offering
multiple camera angles, real-time car
telemetry, in-car audio communications
and a dedicated announcer team for each
driver. This spring, baseball enthusiasts
will enjoy an unprecedented experience
with satellite exclusive access to Major
League Baseball games with the MLB
EXTRA INNINGSSM package. DIRECTV
will signifi cantly expand the package to
include fi rst-ever features such as a game
mosaic channel, a Strike Zone Channel™
and interactive services providing real-time
scores and statistics. And for the growing
group of gamers across the country, the
Championship Gaming Series™ is a new
international video gaming league that
transforms exciting game action into com-
pelling television. Finally, Game Lounge™
is DIRECTV’s new and exclusive gaming
channel with a platform of games intended
to bring family game night back to house-
holds across the country by putting our
customers in the center of the action.
As part of our content differentiation
strategy, we also broadcast a variety of
unique programming on our own channel
for original content, branded as “The 101”.
The array of programming on this channel
includes the MySpace experience coming
to life on Project MyWorld™, video bloggers
from the web on The Fizz™, and exclusive
concerts such as the South By Southwest
music festival featuring two dozen of the
hottest bands and up-and-coming artists.
DIRECTV will also debut several innova-
tive services in 2007. In the middle of this
year, we will launch DIRECTV On Demand™,
an easy-to-use video on demand service
that combines the best of both satellite and
Internet technologies. Customers who have
our DIRECTV Plus® HD receiver will be able
to access 1,000 titles and growing, through
a broadband connection. Customers with this
receiver will also be able to access pictures,
music and home videos on their TVs directly
from Intel® Viiv™ technology-based PCs
in their home. This spring, we will launch
DIRECTV® Sat-Go, the world’s fi rst fully inte-
grated, portable satellite TV system intended
for a variety of indoor and outdoor uses,
including tailgating parties, camping trips
and emergency response.
Building on Momentum; Delivering
Strong Financial Results
Building on last year’s operating performance,
DIRECTV is well positioned to continue
driving strong fi nancial results. Key to our
plan is continued solid subscriber growth
while maintaining a focus on higher quality
customers that optimize ARPU, margin and
churn.
To this end, strengthening all of our sales
channels and increasing sales of HD and DVR
services will be paramount. For example,
last year a revamped directv.com website
and improved local marketing tactics yielded
record results for our direct sales channel,
increasing to 34 percent of our total gross
additions compared to 25 percent the prior
year. We look to continue enhancing this
channel because it plays an integral part in
our goal to improve the quality of the cus-
tomer experience while also controlling costs.
With the implementation of our technol-
ogy roadmap and HD expansion, sales of HD
and DVR services also fi gure prominently in
our plans. We ended 2006 with 30 percent
of our customers having HD and/or DVR ser-
vices, and we’re targeting to grow this share
to 50 percent or more by the end of 2008.
The importance of these advanced services
ANNUAL REPORT 7