Juno 2013 Annual Report Download - page 57

Table of Contents
The decrease in Content & Media services revenues was the result of a 13% decrease in our average number of pay accounts. Excluding the
favorable impact of foreign currency exchange rates, ARPU decreased by 1%. In addition, Content & Media advertising and other revenues decreased
primarily due to a decrease in advertising revenues from our loyalty marketing services as a result of lower revenues per advertising customer, as well
as a decrease in loyalty marketing active accounts. The decrease in Content & Media products revenues was related to the discontinuation of third-party
merchandise sales in the year ended December 31, 2013. Adjusting for the favorable impact of foreign currency exchange rates of $1.1 million due to a
stronger Euro versus the U.S. Dollar, Content & Media revenues decreased by $20.7 million, or 14%. We anticipate that Content & Media pay accounts
and revenues will continue to decline year over year, at least in the near term.
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The decrease in Content & Media cost of revenues was due to a $1.8 million decrease in cost of points earned by members of our loyalty
marketing service due to lower revenues, a $1.6 million decrease in hosting-related fees due to the consolidation of certain data centers and lower
software licensing fees, a $1.2 million decrease in personnel- and overhead-related costs due to our restructuring initiatives, a $0.6 million decrease in
costs associated with the sale of third-party merchandise, and a $0.3 million decrease in credit card-related fees due to a decrease in pay accounts. These
decreases were partially offset by a $1.1 million increase in costs related to the sale of gift cards.
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The decrease in Content & Media sales and marketing expenses was primarily due to a $4.7 million decrease in online marketing costs to acquire
new social networking members primarily due to our cost-cutting efforts and a $3.7 million decrease in personnel- and overhead-related costs due to our
restructuring initiatives.
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  
    
   
Content & Media cost of revenues $ 31,769 $ 35,922 $ (4,153) (12)%
Content & Media cost of revenues as a percentage of Content & Media
revenues 23.7% 23.4%
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  
    
   
Content & Media sales and marketing $ 41,242 $ 49,839 $ (8,597) (17)%
Content & Media sales and marketing expenses as a percentage of
Content & Media revenues 30.8% 32.5%
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  
    
   
Content & Media technology and development $ 19,057 $ 19,552 $ (495) (3)%
Content & Media technology and development expenses as a percentage of
Content & Media revenues 14.2% 12.7%