Satellite-TV leader DirecTV Group (NYSE:DTV) likes its results in high-def.

The company turned in 17% higher revenues year over year, partly thanks to a 7% increase in revenue per subscriber, domestically. No, DirecTV didn't simply increase its programming rates, but U.S. customers are flocking to HDTV offerings and digital video recorders (DVRs) in droves, and these are higher-margin products for the company.

It's not all good news, of course. The company is spending more on the high-def and DVR boxes they're putting into customer homes, though those costs are a short-term concern that enable an extra long-term revenue stream from the equipment lease fees to the customer. So the net income growth looked timid today -- up just one penny over last year to $0.37 per share -- but no pain, no gain.

DirecTV likes to call itself a leader in HDTV services, and not without reason -- it will be only a couple of months until a back-end upgrade to the high-compression MPEG4 video standard brings out more than 100 high-def channels nationwide to DirecTV subscribers. By comparison, my digital cable service -- which is a subsidiary of Time Warner (NYSE:TWX) -- gives me only (please hold while I check my TV) 35 HD channels, all told.

On the DVR front, DirecTV used to offer actual TiVo (NASDAQ:TIVO) equipment, but it has moved to an in-house alternative. Those older TiVo boxes can't handle the MPEG4 standard, so their owners would be out in the cold when that slate of new HD stations rolls out, and subscribers might be forced to upgrade to the service provider's preferred hardware.

The HDTV leadership is helping DirecTV hold on to customers like an outfielder's glove wrapped in sandpaper and coated with super glue. The domestic monthly customer churn rate is a very impressive 1.6%, not too far from TiVo's universe-leading 1.1% per month.  Comparing DirecTV's customer turnover with some of the most fiercely loyal fan bases around shows that the company still comes out near the front of the pack.

Company

Churn rate

TiVo

1.1%

EchoStar (NASDAQ:DISH)

1.4%

DirecTV

1.6%

Netflix (NASDAQ:NFLX)

4.6%

Audible (NASDAQ:ADBL)

2.8%

Sirius (NASDAQ:SIRI)

2.3%

That's how you build lasting success in a subscription-based business -- make raving fanatics out of your customers. Then sit back and watch them upgrade to nicer service options while they give you free word-of-mouth advertising. Sweet.

Churn that butter, Fool:

Netflix and Time Warner are active Motley Fool Stock Advisor recommendations, while TiVo has dropped off that same scorecard. Find out what happened with a free 30-day trial pass to our flagship investment newsletter service.

Fool contributor Anders Bylund is a Netflix shareholder but holds no other position in any of the companies discussed here, though he also believes in Audible and TiVo. You can check out Anders' holdings if you like, and Foolish disclosure believes in coyotes and time as an abstract.