Chairman Inouye, Co-Chairman Stevens and members of the Committee, I am Jon Gieselman, Senior Vice President of Advertising and Public Relations for DIRECTV, Inc. (DIRECTV).  Thank you for inviting DIRECTV to discuss the steps we are taking to support the transition to digital television. 

First, the satellite industry is proud of its leadership in digital television.  Our industry has always been about driving competition and choice in the video marketplace and a big part of our value proposition has been our commitment to digital television. Indeed, we are pioneers in this area.  From the first day of service, both DIRECTV and DISH Network were built as all-digital platforms.  That choice, made on behalf of consumers over a decade ago, has positioned the satellite industry as leaders in the digital revolution. 

            Second, as a result, of our commitment to digital television, February 17, 2009 will just be another day on the calendar for DIRECTV and DISH Network subscribers. Their service will not change.  The only snow satellite subscribers may see on February 17, 2009 could be that falling outside their windows.  Their satellite picture will continue be digital and crystal clear.

            Third, DIRECTV is extending our commitment to customer service by working to educate our customers and also assist over-the-air television households through the digital television transition.  We will provide information about the digital television transition including how they may continue to receive local television programming over the air and how they may choose to become DIRECTV subscribers.

 

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Mr. Chairman, for DIRECTV the digital television revolution began when Cowboy Malone’s, a local retailer in Jackson, Mississippi signed up and installed our first customer on June 17, 1994.  DIRECTV has been all-digital ever since and over 16 million households and small businesses have joined the digital television revolution with DIRECTV.  They enjoy superb picture quality, unmatched programming choice and award winning customer service. 

 When combined with subscribers of DIRECTV’s competitor DISH Network, this is even more impressive.  Today, 31 million subscribers have chosen satellite’s 100% digital pictures and sound.  This means that roughly 31 million satellite subscribers have already made the digital conversion.  They need to do nothing when analog broadcasting ends.  This is because the satellite industry has invested billions of dollars to bring the digital television revolution to households and small businesses across America. Indeed, this effort goes beyond simply offering digital pictures and sound.  DIRECTV is now the leading provider of high definition (HD) television service. 

HD content is changing the viewing experience for millions of DIRECTV subscribers.  HD is creating a new world of entertainment, information and education; a world of startling picture and sound quality; a world of excitement and engagement; and a world of programming choice and diversity.  It is a world that DIRECTV is bringing to our subscribers through our billion dollar investment in HD content and delivery infrastructure.  It is a world that Congress envisioned when it passed legislation ushering in the DTV conversion.  So while Senator McCain could then only “[i]magine last night's All-Star game broadcast with such stunning clarity that you seem to be watching it through a window rather than on a screen,” he can now see that game on DIRECTV.[1]  And while Senator Hollings then thought that “high-definition television, not digital television, but digital, high-definition television [would be] to the next century what color television was to the '50s and '60s,” that day is already here for DIRECTV subscribers.[2]  So it is no longer true that Americans would someday have “brilliant, crystal clear video, CD quality surround sound, and wide-screen picture that creates a ‘night-at-the-movies’ sensation right in one's own living room.”[3]  DIRECTV subscribers have all of this today.

DIRECTV is thus a big part of the highly competitive pay television marketplace that is delivering on the goals and expectations of Congress and this Committee.  Although DIRECTV subscribers enjoy over 250 channels of 100 percent digital picture and sound, including local HD broadcast signals in 61 U.S. cities, we plan to do more to expand our HD services.  We recently launched one new satellite which allows us to offer a wider range of HD channels and services.  By year end, DIRECTV will retransmit local network HD stations in up to 75 markets.  By the end of 2008 with the launch of a second HD satellite, we will have the capacity to provide 1,500 local HD channels and 150 national HD channels.  And our national lineup of 72 HD channels already includes nearly every major HD channel from Animal Planet HD, Bravo HD and CNBC HD to Universal HD, Versus HD and the Weather Channel HD (complete list and press release attached).

 Mr. Chairman, DIRECTV is proud of our record of competing in the marketplace.  We are particularly proud of the fact that our competitive position is based largely on our hard-earned reputation for superior customer service.  At this critical moment of transition for our industry and the country, DIRECTV will continue to serve consumers diligently by doing everything necessary to ensure that our subscribers are ready for the analog-to-digital transition on February 17, 2009.  DIRECTV subscribers who rely on over-the-air television stations will also be ready.  Just as they do today, this small subset of our subscribers will use a seamless, integrated over-the-air tuner that is built into their set-top box.  Every DIRECTV subscriber who needs a set top box to view local digital programming will have one.  Because we are taking care of all of our customers with the necessary equipment, the National Telecommunications and Information Administration’s (NTIA) digital-to-analog converter box coupon program will be available to the over-the-air households that truly need it.

With this overview of the satellite industry and DIRECTV as a backdrop, we intend to ensure our subscribers know that they have already made a seamless transition away from analog broadcasting.  Toward this goal, we plan several outreach initiatives. 

            To help minimize consumer confusion, we will broadcast a clear message to our consumers that they should sit back and continue enjoying their DIRECTV service through the transition period.  We will deliver this concise message using nearly every point of contact we have with our customers including; customer service agents, retailers, installers, on-air announcements, bill-stuffers, our website and email.  We will make certain our customers are aware that they did everything they needed to do to prepare for the digital transition the day they signed up with DIRECTV.  The message will reassure DIRECTV subscribers that the only decisions they have to make as their local television stations go all-digital, is whether to watch their favorite sitcom, nature program or sporting event in 100% digital picture and sound. 

No matter if they own a 72-inch plasma, a 46-inch LCD or the latest DLP, DIRECTV customers will be set for the digital age.  Whether their television delivers 1080p, 1080i, 720p or 480i, they are set for the coming switchover – and the same goes for those who may have a recently purchased a 4:3 aspect ratio television with a digital tuner or have an older analog television.  When our customers signed on to DIRECTV and subscribed to our services, they in turn joined the digital television revolution. 

Communicating this concise message during the transition period should all but eliminate demand from DIRECTV customers for the NTIA’s digital-to-analog converter box coupon program.  Since DIRECTV subscribers do not need to purchase digital-to-analog converters, the only requirements they must contend with is to surf between channels until they find their favorite programming on DIRECTV.  Our customers will sit back and continue enjoying DIRECTV service through the transition period.  They will not need to make a retail purchase of a converter box, nor apply for a NTIA digital-to-analog converter box coupon.  We will use e-mail, customer service representatives, installers, retailers, bill inserts, our web site and on screen messages and programming to make sure DIRECTV subscribers know that that they are set for the digital television transition.  In other words, if our comprehensive education efforts are successful, DIRECTV customers will not clog the system nor add to the demand encountered during the switchover.

Mr. Chairman, DIRECTV is also committed to doing its part to assist the estimated 18 million households that do not subscribe to satellite or cable television service.  These households rely on over-the-air (OTA) reception for local network programming.  As you are aware, OTA households that have an analog television will need to purchase and install a converter box to receive television programming beginning February 17, 2009 or purchase a new digital television.  DIRECTV will support efforts to educate these households about the digital television transition.

As a part of this outreach, DIRECTV is a member of the Digital Television Transition Coalition (DTTC).  DTTC members are working to make the digital transition as smooth as possible for consumers.  DTTC will support coordinated efforts to inform viewers of their options in advance of the transition.

DIRECTV is also planning its own independent public relations, advertising, and promotional campaigns that will begin early next year and run through early 2009.  These campaigns will discuss the benefits of DIRECTV, offer special subscription opportunities for those who currently do not subscribe to DIRECTV, and help those who wish to continue to receive OTA broadcasts to take only those steps necessary to stay tuned to their local broadcasters.

DIRECTV plans to begin its outreach efforts early next year with two public service announcements (PSAs) geared toward our existing customer base.  The first PSA will inform DIRECTV customers about the seamless digital transition they will undergo as a DIRECTV subscriber.  The second PSA will encourage our customers to check on their elderly parents, grandparents, neighbors and friends, including those that are not DIRECTV subscribers.  This effort will help educate this group about the upcoming digital transition and the steps they need to take to stay tuned in to their favorite television programming. 

DIRECTV will also incorporate the ideas from both of these PSAs into a 30-minute long-form program that we will produce and air continuously on DIRECTV’s “Customer Support Channel” beginning in April 2008.  The program will celebrate DIRECTV’s 13 years of digital service, highlight our commitment to HD service, and let our subscribers know that they are set for the digital transition.  We will help our customers guide their family and friends through the digital television transition with information about the NTIA digital-to-analog converter box program and information about DIRECTV’s low-price offer for households who may use the transition to consider a pay television provider.

We are also creating an interesting and entertaining educational tool to inform DIRECTV customers about the digital television transition.  Since DIRECTV customers are already treated to cutting edge and high-quality programming, we’ve taken that idea to a whole new level – and created a new addition to the DIRECTV family. 

Our DIRECTV Web site now features a virtual customer service representative named Diane, and she will guide our subscribers and anyone who visits our website, DIRECTV.com, through the digital television conversion.  Diane currently gives DIRECTV customers information about DIRECTV’s services and packages.  We will create a whole new Diane, complete with a wealth of knowledge and information about digital television, HD programming and the 2009 digital television transition.  Diane will become DIRECTV’s virtual online educational platform for the digital transition.  We plan to drive consumers to the DIRECTV website using PSAs and our Customer Support Channel so they may view Diane and hear what she has to say about the upcoming transition.  We will also promote Diane through a substantial email campaign to our customers and through social networking sites.   

DIRECTV is very supportive of your efforts to ensure that consumers have all the information they need regarding the digital transition.  DIRECTV has every incentive to not only assuage any anxiety that our current customers may feel when they hear or read about the coming switchover, but to also help viewers currently receiving only over-the-air broadcasts.

 

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DIRECTV is set to not only begin an aggressive education and outreach campaign toward our current customer base, but we hope to engage other consumers as the digital transition draws nearer.  As I’ve stated throughout this testimony, DIRECTV customers will not be affected by the digital transition. This is the most important message we can continue to deliver.  But there is much work to be done and we welcome the opportunity to be part of the process. This is an exciting time for our industry and we want consumers to embrace the possibilities – not shy away from them. Mr. Chairman, Co-Chairman Stevens and members of the Committee, thank you for allowing me to speak on this important issue today and to talk about DIRECTV’s contribution to the educational and outreach efforts tied to the forthcoming digital transition. I am happy to take your questions.

Contact:        Robert Mercer                                               Darris Gringeri

                        DIRECTV, Inc.                                              DIRECTV, Inc.

                        (310) 964-4683                                             (212) 462-5136

EL SEGUNDO, Calif., Oct. 15, 2007 – DIRECTV, the nation’s leading satellite television service provider, is now offering 72 national HD channels – significantly more than any other television provider in the nation. This is the first wave in DIRECTV’s unprecedented expansion of HD services that is building towards up to 100 HD channels by year-end*.

 “If you own a high-definition television, or are thinking about buying one, you can now watch your favorite channels in crystal-clear DIRECTV HD™,” said Derek Chang, executive vice president, Content Strategy and Development, DIRECTV, Inc. “The DIRECTV HD programming expansion that consumers have been waiting for has become a reality.  We overwhelmingly lead the industry in terms of both quantity and quality of HD programming. There simply isn’t a better television experience on the planet.” 

The full DIRECTV HD programming lineup, including the new channels, and details on receiving equipment needed for the new DIRECTV HD services, are available by calling 1-800-DIRECTV or visiting directv.com.

DIRECTV’s current HD lineup includes:

DIRECTV HD customers will continue to pay only a $9.99 access fee,  allowing them to receive DIRECTV’s premier HD technology and all channels broadcast in HD that are tied to their particular base programming package.

Customers who want the ultimate HD experience can subscribe to the DIRECTV^® HD EXTRA PACK for an additional $4.99 per month.  This new addition of HD-only channels is for the true HD fan and includes:  HDNet, HDNet Movies, Universal HD, MHD, Smithsonian HD and MGM HD.

In addition to the national HD channels listed above, DIRECTV also offers 245 local HD channels across 61 cities, representing more than 70 percent of U.S. TV Households.

The DIRECTV 11 satellite will be launched early next year to support further HD expansion.  With the two satellites, DIRECTV will have the ability to deliver 150 national HD channels and 1,500 local HD and digital channels in addition to new advanced programming services for customers.

 

* Number of HD channels subject to available HD programming and varies by base package selection.

** Eligibility required.

*** 2007 American Customer Satisfaction Index, University of Michigan Business School.

 

DIRECTV, Inc., the nation’s leading satellite television service provider, presents the finest television experience available to more than 16.3 million customers in the United States, through exclusive content, industry-leading customer satisfaction (which has surpassed cable for seven years running) and superior technologies***.  Each day, DIRECTV subscribers enjoy access to over 250 channels of 100% digital picture and sound, exclusive programming and the most comprehensive collection of sports programming available anywhere, including NFL SUNDAY TICKET™ and MLB EXTRA INNINGS®.  DIRECTV (NYSE:DTV) also leads the digital television technology revolution with exclusives such as NFL SUNDAY TICKET SuperFan™, US Open Interactive and YES Network Interactive and will soon have the capacity to offer over 150 national HD channels*.  For the most up-to-date information on DIRECTV, please visit directv.com.

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