Enom 2014 Annual Report Download - page 15

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12
If we are unable to successfully implement our new online marketplace initiatives, or if the revenue generated from these
initiatives is less than the costs of such initiatives, our business, financial condition and results of operations could be adversely
affected.
We operate two leading artist marketplaces where large communities of artists can market and sell their original artwork and
their designs on art prints and other products. Society6, which we acquired in June 2013, provides artists with an online commerce
platform to feature and sell their original designs on art prints, phone and tablet cases, t-shirts and other consumer products. Saatchi
Art, which we acquired in August 2014, is an online art gallery featuring a wide selection of paintings, drawings, sculpture and
photography that provides a global community of artists a curated environment in which to exhibit and sell their work directly to
consumers around the world. We have limited experience in implementing, marketing, managing and growing these revenue streams.
The success of our marketplace initiatives is dependent upon a number of factors, including:
• demand for these products, market acceptance of our products and our ability to attract new customers;
• increased brand awareness and the reputation of our online marketplaces;
• our ability to maintain the artist communities on Society6 and Saatchi Art so that artists continue to contribute and
maintain their original artwork and designs on these marketplaces;
• our ability to cost-effectively develop, introduce and market new products on a timely basis to address changing
consumption trends, consumer preferences and new technologies;
• the success and competitiveness of new entrants into this highly competitive industry;
• competitive pricing pressures, including potential discounts offered to attract customers and reduced or free shipping;
• maintaining significant strategic relationships with our print-on-demand suppliers and ensuring the quality of their
products and the timeliness of our production cycle;
• disruptions in the supply-chain, production and fulfillment operations associated with the print-on-demand products sold
through our online marketplaces;
• shipping disruptions or delays with the products sold through our online marketplaces;
• the return rate for products sold through our online marketplaces;
• the overall growth rate of e-commerce and online marketplaces;
• overall changes in consumer spending on discretionary purchases; and
• legal claims, including copyright and trademark infringement claims, associated with content that is included in the
products sold through our online marketplaces, as well as product liability claims, both of which may expose us to greater
litigation cost in the future as compared to historical levels.
If we are unable to successfully implement our new online marketplace initiatives, or if the revenue generated from these
initiatives is less than the costs of such initiatives, our business, financial condition and results of operations could be adversely
affected.
If we are unable to attract and retain visitors to our online properties or customers for our artist marketplaces, our business,
financial condition and results of operations would be adversely affected.
In order for our business to grow, we must attract new visitors to our online properties and new customers for our artist
marketplaces, and we must retain our existing visitors and customers. Our success in attracting traffic to our owned and operated
online properties and to our customers’ online properties and converting these visitors into repeat users depends, in part, upon our
continued ability to identify, create and distribute high-quality content and connect consumers with the formats and types of content
that meets their specific interests and enables them to interact with supporting communities. We may not be able to identify and create
the desired variety, quality and types of content in a cost-effective manner or meet rapidly changing consumer demand in a timely
manner, if at all.