DIRECTV 2007 Annual Report Download - page 7

We continued to build our original enter-
tainment programming lineup shown on The
101™
. Customers can view unique events such
as South By Southwest, the legendary music
festival; Passions, an exclusive TV soap opera;
and the Championship Gaming Series, the
largest professional video gaming league in
the world. In addition, we’re debuting new TV
series produced exclusively for DIRECTV such as
Rock and a Hard Place, The Supreme Court of
Comedy and DIRECTV Hometown Heroes.
And in 2008, we will offi cially launch
DIRECTV on DEMAND, our answer to cable’s
video-on-demand offering. DIRECTV on
DEMAND is currently in Beta testing and
generating great reviews. Early users agree
that our service is more user-friendly than
other comparable offerings. Content is deliv-
ered to consumers from both a broadband
connection and via satellite. This gives us
a wide variety of options to deliver content
in the most effi cient way and to be well-
positioned for all the future possibilities the
Internet holds.
On the technology side, we’ve built the
foundation for our future through state-of-
the-art set-top boxes, satellites and a national
ground infrastructure. Our HD and DVR
receivers – all of which have been designed
with a common user interface and fl exibility
for future software upgrades – lead the
industry in many key areas and provide us
with important competitive advantages.
Another key technology initiative is
the use of the Internet to further enhance
our service. Today, DIRECTV on DEMAND
customers can access thousands of titles and
download them via the Internet. We also
recently launched our DVR Scheduler service,
which allows customers to remotely record
shows to their DVR through directv.com or
a cell phone. In addition, DIRECTV is now
available in the car, in the air and through
our portable DIRECTV Sat-Go product that
combines a TV screen and satellite antenna
in one convenient unit.
DIRECTV LATIN AMERICA – Exceeding
Expectations
2007 was the fi rst full year of performance
following the successful transactions that
combined the DIRECTV and SKY platforms
in Latin America. We now own 74% of Sky
Brazil, 41% of Sky Mexico and 100% of
PanAmericana, which covers most of the
remaining countries in the region.
Clearly, the newly integrated companies
have found tremendous success, as evidenced
by a more than doubling of net subscriber
additions in 2007 to 588,000 and an impres-
sively low monthly churn rate of 1.38%.
In March 2008, the combined platforms of
DIRECTV, PanAmericana, SKY Brazil and SKY
Mexico passed the 5 million subscriber mark,
a signifi
cant milestone that was achieved
faster than our original target.
A key element of DIRECTV Latin America’s
strategy is to gain competitive advantages
by leveraging the scale and technology of
the U.S. business. As a result, we introduce
superior products and services ahead of our
competitors and at a lower cost.
The benefi ts of this strategy were in full
force last year when we were the fi rst to
introduce DVRs throughout the region. We
also offer popular U.S. packages including
NFL SUNDAY TICKET™, NASCAR HotPass™,
MLB EXTRA INNINGS and GAME LOUNGE.
We plan to be the fi rst to launch quality
HD programming in PanAmericana in the
second half of 2008, and in Mexico and
Brazil in 2009.
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Financially, we expect to take
DIRECTV to a whole new level in terms of profi tability
and cash fl ow growth.
ANNUAL REPORT 5