Juno 2012 Annual Report Download - page 42
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Table of Contents
The success of our online nostalgia and online loyalty marketing services depends upon our ability to increase or maintain the number of visitors to
our websites, our base of free members and the level of activity of those visitors and members. A decline in the number of visitors, registered or active
free online nostalgia members, or a decline in the activity of those members, could result in decreased pay accounts, decreased content on our websites
and decreased advertising revenues. A decline in the number of registered or active online loyalty marketing service members could also result in
decreased advertising revenues. We have been experiencing a decline in the number of active members, and we believe this trend will continue. The
failure to increase or maintain the number of visitors to our websites, our base of free members, or the failure to convince our free members to actively
participate in our websites or services, could have a material adverse effect on our business and our financial results.
Due to economic conditions and for competitive and other reasons, we have been offering a large percentage of discounted pricing plans on a
promotional basis. In general, these discounted pricing plans offer a subscription term at a significant discount compared to the standard pricing for such
subscription term. Any increases in the percentage of pay accounts under a discounted pricing plan and any increases in the level of the discounts will
likely result in a decrease in subscription revenues and ARPU, in particular, if such increases continue. Although these discounted pricing plans, by
their terms, renew at the then-current standard pricing for such subscription term upon the expiration of the initial term, there are no assurances as to the
number of pay accounts that will renew at the then current-standard pricing or at all. We intend to continue offering discounted pricing plans in the
future, and there are no assurances that the volume or level of the discounts offered during a period will not be higher than anticipated. Our continued
use of discounted pricing plans has resulted in our becoming dependent on offering such plans in order to obtain new pay accounts and retain existing
pay accounts and may result in our having to reduce our standard pricing, which would adversely impact our financial results.
We compete with numerous providers of broadband services, as well as other dial-up Internet access providers. Our principal competitors for
NetZero 4G mobile broadband and DSL services include, among others, local exchange carriers such as AT&T and Verizon, wireless and satellite
service providers, and cable service providers. Our principal dial-up Internet access competitors include established online service and content
providers, such as AOL and MSN, and independent national Internet service providers, such as EarthLink and its PeoplePC subsidiary. Dial-up
Internet access services do not compete favorably with broadband services with respect to connection speed and do not have a significant, if any, price
advantage over certain broadband services. Many broadband providers, including cable companies and local exchange carriers, bundle their offerings
with telephone, entertainment or other services, which may result in lower prices than standalone services. Certain portions of the U.S., primarily rural
areas, currently have limited or no access to broadband services. However, the U.S. government has indicated its intention to facilitate the provision of
broadband services to such rural areas. Such expansion of the availability of broadband services will increase the competition for Internet access
subscribers in such areas and will likely adversely affect our business. In addition to competition from broadband providers, competition among dial-up
Internet access service providers is intense and neither our pricing nor our features provides us with a significant competitive
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