Juno 2014 Annual Report Download - page 35

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Table of Contents

We review a number of key business metrics to help us monitor our performance and trends affecting our businesses, and to develop forecasts and
budgets. These key measures include the following:
 We generate a significant portion of our revenues from our pay accounts, which represent one of the most important drivers of our
business model. A pay account is defined as a member who has paid for a subscription to a Communications or Content & Media service, and whose
subscription has not terminated or expired. A subscription provides the member with access to our service for a specific term (for example, a month or a year)
and may be renewed upon the expiration of each term. One-time purchases of our services, with the exception of our free and prepaid mobile broadband
service, are not considered subscriptions and thus, are not included in the pay accounts metric. A pay account does not equate to a unique subscriber because
one subscriber could have several pay accounts. In addition, at any point in time, our pay account base includes customers who previously purchased prepaid
mobile broadband service and have been inactive for 90 days or less, as well as a number of accounts receiving a free period of service as either a promotion
or retention tool, such as the subscribers receiving our free mobile broadband service, and a number of accounts that have notified us that they are
terminating their service but whose service remains in effect. In general, the key business metrics that affect our revenues from our pay accounts base include
the number of pay accounts and the average monthly revenue per pay account. A pay account generally becomes a free account following the expiration or
termination of the related subscription.
 We monitor average monthly revenue per pay account ("ARPU"), which is calculated by dividing services revenues generated from the pay
accounts of our Communications or Content & Media segment, as applicable, for a period (after translation into U.S. Dollars) by the average number of
segment pay accounts for that period, divided by the number of months in that period. The average number of pay accounts is the simple average of the
number of pay accounts at the beginning and the end of a period. ARPU may fluctuate significantly from period to period as a result of a variety of factors,
including, but not limited to, the extent to which promotional, discounted or retention pricing is used to attract new, or retain existing, paying subscribers;
changes in the mix of pay services and the related pricing plans; increases or decreases in the price of our services; the timing of pay accounts being added or
removed during a period; and for the Content & Media segment the average foreign currency exchange rate between the U.S. Dollar and the Euro.
 To evaluate the retention characteristics of our membership base, we also monitor the percentage of pay accounts that terminate or expire,
which we refer to as our average monthly churn rate. Our average monthly churn rate for a period is calculated as the total number of pay accounts that
terminated or expired in a period divided by the average number of pay accounts for that period, divided by the number of months in that period. Our average
monthly churn percentage may fluctuate from period to period due to our mix of subscription terms, which affects the timing of subscription expirations, and
other factors. We make certain normalizing adjustments to the calculation of our churn percentage for periods in which we add a significant number of pay
accounts due to acquisitions. For our Communications segment, our churn calculation does not include accounts canceled during the first 30 days of service
other than dial-up accounts that have upgraded from free accounts, but the calculation does include customers who previously purchased prepaid mobile
broadband service and, at any time during the period, reached 90 consecutive days of inactivity. A number of such accounts nevertheless will be included in
our pay account totals at any given measurement date. Subscribers who cancel one pay service but subscribe to another pay service are not necessarily
considered to have canceled a pay account depending on the services and, as such, our segment churn rates are not necessarily indicative of the percentage of
subscribers canceling any particular service.
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