DIRECTV 2009 Annual Report Download - page 24

DIRECTV
DIRECTV LATIN AMERICA
DTVLA is the leading provider of DTH digital television services throughout Latin America and
the Caribbean, which includes Puerto Rico. DTVLA provides a wide selection of high-quality local and
international programming under the DIRECTV and SKY brands to approximately 2.7 million
subscribers in PanAmericana and approximately 1.9 million subscribers in Brazil. Our 41% owned
affiliate, Sky Mexico, has more than 1.9 million subscribers in Mexico and certain countries in Central
America. Including Sky Mexico, DIRECTV and SKY service over 6.5 million customers throughout the
region.
We own 100% of PanAmericana (which operates principally in South America and the Caribbean,
including Puerto Rico), 74% of Sky Brazil (which operates in Brazil), and 41% of Sky Mexico (which
operates in Mexico, Central America and the Dominican Republic). Globo Comunica¸c˜ oes e
Participa¸c˜ oes S.A., or Globo, owns the other 26% of Sky Brazil and Grupo Televisa, S.A., or Televisa,
owns the other 59% of Sky Mexico. The results of PanAmericana and Sky Brazil are consolidated in
our results. We account for our 41% interest in Sky Mexico under the equity method of accounting.
In connection with the approval of Liberty Media’s acquisition of its equity interest in us from
News Corporation in February 2008, the FCC required DTVLA to sever the ‘‘attributable interests’’
between our 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 is required to
oversee the management and operation of DIRECTV Puerto Rico, and has the authority, subject to
certain conditions, to divest ownership of DIRECTV Puerto Rico. We 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 picture and 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 and Sky Brazil have aligned their set-top receiver 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. Sky
Mexico is also in the process of aligning its set-top receiver technology with DIRECTV U.S.
•Leading Brands. DIRECTV and SKY continue to position their brands in Latin America as a
leader in digital entertainment and the best quality television available. In 2009, this was
particularly accentuated by the aggressive positioning of our advanced products, such as DVRs
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