Cable television still reigns supreme in terms of market share, but DirecTV has put satellite broadcasting on the pay-TV map.
"There are over 100 million television-viewing households, and the beauty of satellite is that we have instant reach into all of those markets and households," says Terry Ferguson, vice president of business development and strategic planning at DirecTV.
DirecTVs 10-million-customer base has made the No. 1 satellite TV provider the belle of the acquisitions ball. News Corp.s long-standing offer to acquire DirecTV parent Hughes Electronics was turned on its head in late May, when Charlie Ergen, EchoStar Communications brash chairman, said he was in deep negotiations with financial backers and intended to make an offer for his companys larger, chief competitor.
The merger waters were further confused when Hughes Chairman Michael Smith, who favored a link-up with EchoStar, abruptly retired.
Whichever company ends up as DirecTVs partner in the back office will find it has hammered out deals that allow it to offer lucrative new services to its customers. "The great thing about our model is that we can take advantage of any new advancements in technology," Ferguson says.
Last year, DirecTV and TiVo unveiled a satellite receiver that combines DirecTV TV programming and TiVos leading Personal TV service. The company also announced a similar offering that integrates Ultimate TV from Microsofts WebTV Networks.
DirecTV, led by CEO Odie Donald, is also moving into high-speed two-way Internet service over satellite. And DirecTVs sister company, Hughes Network Services, completed its acquisition of Telocity, a land-based DSL company.
Other corporate initiatives have focused on customer service levels, even linking corporate bonuses to the results of customer satisfaction surveys. "We have made it so that our employees believe that customer service is their first job, no matter what they do. We know that if we let a customer down, it is easy for them to go back to cable," Ferguson says.