Juno 2014 Annual Report Download - page 61
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Table of Contents
Communications restructuring and other exit costs were immaterial for the years ended December 31, 2013 and 2012.
Content & Media Segment Results
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.
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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Communications restructuring and other exit costs $ — $ (8) $ 8 (100)%
Services $ 82,591 $ 95,119 $ (12,528) (13)%
Products 3,136 3,646 (510) (14)%
Advertising and other 48,120 54,731 (6,611) (12)%
Total Content & Media revenues $ 133,847 $ 153,496 $ (19,649) (13)%
ARPU $ 2.50 $ 2.49 $ 0.01 —%
Average pay accounts 2,748 3,174 (426) (13)%
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%