DIRECTV 2008 Annual Report Download - page 25

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THE DIRECTV GROUP, INC.
In connection with the approval of the Liberty Transaction in February 2008, the FCC required
DTVLA to sever the ‘‘attributable interests’’ between its DIRECTV-Puerto Rico subsidiary and Liberty
Cablevision of Puerto Rico, Ltd., or LCPR, by February 26, 2009. We assumed responsibility for
satisfaction, modification or waiver of this condition. In order to comply with terms of the FCC order,
effective February 25, 2009, we placed the shares of DIRECTV Puerto Rico into a trust and appointed
an independent trustee who will be required to oversee the management and operation of DIRECTV
Puerto Rico, and will have the authority, subject to certain conditions, to divest ownership of
DIRECTV Puerto Rico. We will continue to consolidate the results of DIRECTV Puerto Rico
following this transaction.
Key Strengths
•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, as well as
interactive features. We believe that this compares favorably with cable providers in Latin
America, who typically continue to broadcast only analog services or a combination of analog
and digital services to a large percentage of their subscribers.
•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.
•Relationship with DIRECTV U.S. We believe that DTVLA’s relationship with DIRECTV U.S. is a
key strength. PanAmericana has aligned its set-top box specifications and middleware
technologies with those of DIRECTV U.S., allowing them to take advantage of DIRECTV U.S.’
economies of scale. We believe it also allows DTVLA to launch new features and services at a
lower cost and move more rapidly than its competitors in Latin America. We expect that Sky
Brazil and Sky Mexico will align their box technology with DIRECTV U.S. later this year.
DTVLA also distributes some of DIRECTV U.S.’ most popular programming, such as the NFL
Sunday Ticket and MLB Extra Innings.
•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 which 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. Our strategy
focuses on leveraging our competitive advantages that differentiate our service offerings from those of
our competitors.
•Offer Unique Content. We expect that we can leverage our greater scale to offer unique and
compelling content to subscribers. For example, Sky Brazil, Sky Mexico and PanAmericana have
licensed exclusive rights to the Spanish soccer league through the 2011-2012 season, which in
most countries is the second most popular soccer league, after the local country leagues. As a
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