DIRECTV 2012 Annual Report Download - page 14

And finally, we’re establishing a discipline to get it right the first time—
every time—throughout all of our service interactions. This includes greater
effectiveness in resolving problems as well as enhancing our focus on
leveraging the service experience to drive better awareness, education
and engagement for our products and services.
Although we have only scratched the surface, the bottom-line is, we’re
striving for excellence in delivering a customer experience that creates
passionate and loyal customers for life.
DELIVERING ON OUR OPERATING AND FINANCIAL GOALS
DIRECTV has always drawn on a world-class capability to flawlessly execute
our financial and operating plans. The next three years will be no different.
One of the keys to a healthy core business—especially as our industry matures
and programmers seek even higher rates for their content—is maintaining
momentum in top-line sales to deliver strong profit margins. That means
positioning ourselves to grow our average revenue per user through
smart pricing and being disciplined in the way we manage discounts and
promotions. We must also continue to drive top-line growth through ancillary
and non-residential revenue opportunities including DIRECTV CINEMA, the
commercial property market, and addressable and local advertising.
We’re also continuing to enhance our focus on achieving operational excellence
through disciplined expense management while still making strategic
investments that will deliver future benefits, and drive efficiencies that help
preserve a sustainable lean cost structure. In particular, we’re looking to
capture productivity improvements to keep our Subscriber Services, Broadcast
Operations, and General & Administrative expenses growing slower than
revenues. Identifying efficiencies will also improve call center performance; field
operations such as installations and repairs; retention and customer satisfaction.
Finally, rising programming costs remain our greatest challenge and are
clearly the most significant issue facing our industry today. We continue to
believe that all of us in this industry, both on the content side and distribution
side, need to spend a lot more time focusing on the consumer—
particularly in this weak economy. Expecting the customer to bear
the brunt of programming increases is just not sustainable and all of
us at DIRECTV are committed to continuing to stand up and put our
customers first. As we demonstrated in 2012, we will remain disciplined
in every negotiation and focus on securing fair terms that reflect the
value of the programming, as well as the size, scale and quality of the
DIRECTV customer base. We will continue to seek more flexibility in
packaging and pursue additional digital rights for new value-added
services. And, if we are unable to obtain fair terms and conditions,
we won’t shy away from making some tough decisions regarding the
programming we carry on the DIRECTV platform.
With these winning strategies in place, our U.S. business is well positioned
to continue delivering mid-single-digit revenue and operating profit before
depreciation and amortization growth over each of the next three years.
DIRECTV LATIN AMERICA: THE BEST IS YET TO COME
Turning now to our Latin American business, the overall macroeconomic
forecast is generally more favorable than in the U.S. Household formation
continues to grow, along with disposable income per household, as
the region-wide migration of millions of people into the middle class
continues. In parallel with these macro-trends, across the region pay-TV
continues to gain acceptance as a common consumer “must-have.”
In this environment, DIRECTV enjoys some distinct advantages. Start
with a continental footprint that allows us to negotiate with certain
programmers on a region-wide basis, enabling us to take full advantage of
scale, obtain volume discounts, and offer exclusive and unique content
that many of our competitors negotiating country-by-country simply
cannot match. Add the advantages of our relationship with DIRECTV
U.S., our low cost-per-home-passed satellite technology, and our ability to
deliver premium brands and attractive products at price points for every
market segment, both high-end and low-end. Complete the package with