TiVo 2008 Annual Report Download - page 47

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Table of Contents
We calculate ARPU per month for TiVo-Owned subscriptions by subtracting MSOs/Broadcaster-related service revenues (which includes MSOs/
Broadcasters' subscription service revenues and MSOs/Broadcasters'-related advertising revenues) from our total reported net service revenues and dividing
the result by the number of months in the period. We then divide by Average TiVo-Owned subscriptions for the period, calculated as described above for
churn rate. The following table shows this calculation:
Fiscal Year Ended January 31,
TiVo-Owned Average Revenue per Subscription 2009 2008 2007
(In thousands, except ARPU)
Total Service revenues $ 188,408 $ 211,496 $ 198,924
Less: MSOs/Broadcasters'-related service revenues (22,412) (27,440) (32,257)
TiVo-Owned-related service revenues 165,996 184,056 166,667
Average TiVo-Owned revenues per month 13,833 15,338 13,889
Average TiVo-Owned per month subscriptions 1,695 1,721 1,584
TiVo-Owned ARPU per month $ 8.16 $ 8.91 $ 8.77
The decrease in TiVo-Owned ARPU per month for the fiscal year ended January 31, 2009 was largely related to the increase in amortization period of
our product lifetime subscriptions. Effective November 1, 2008, we have extended the period we use to recognize product lifetime subscription revenues from
54 months to 60 months for all new and not fully amortized product lifetime subscriptions. We now amortize all product lifetime subscriptions over a 60
month period. Refer to Critical Accounting Estimates "Recognition Period for Product Lifetime Subscriptions Revenues." Due to this extended revenue
recognition period and the reduction in our subscription rates in November 2008, we expect fiscal year 2010 TiVo-Owned ARPU per month to be lower.
Additionally, impacting the decrease in our ARPU was an increase of approximately 50,000 TiVo-Owned product lifetime subscriptions that reached the end
of the period we use to recognized product lifetime subscription revenue. These subscriptions are currently included in the Average TiVo-Owned per month
subscriptions; however, there are no longer any corresponding revenues related to those subscriptions.
The increase in TiVo-Owned ARPU per month for the fiscal year ended January 31, 2008 was largely due to our sales programs which yielded a higher
service plan rates for new TiVo-Owned subscriptions. This increase was partially offset by an increase of 10,000 TiVo-Owned product lifetime subscriptions
that reached the end of the period we use to recognized lifetime subscription revenue.
We calculate ARPU per month for MSOs/Broadcasters' subscriptions by first subtracting TiVo-Owned-related service revenues (which includes TiVo-
Owned subscription service revenues and TiVo-Owned related advertising revenues) from our total reported service revenues. Then we divide average
revenues per month for MSOs/Broadcasters'-related service revenues by the average MSOs/Broadcasters' subscriptions for the period. The following table
shows this calculation:
Fiscal Year Ended January 31,
MSOs/Broadcasters' Average Revenue per Subscription 2009 2008 2007
(In thousands, except ARPU)
Total Service revenues $ 188,408 $ 211,496 $ 198,924
Less: TiVo-Owned-related service revenues (165,996) (184,056) (166,667)
MSOs/Broadcasters'-related service revenues 22,412 27,440 32,257
Average MSOs/Broadcasters' revenues per month 1,868 2,287 2,688
Average MSOs/Broadcasters' per month subscriptions 1,939 2,481 2,836
MSOs/Broadcasters' ARPU per month $ 0.96 $ 0.92 $ 0.95
Included in the MSOs/Broadcasters'-related service revenues for the fiscal year ended January 31, 2008 is $1.1 million of DIRECTV revenue that was
deferred in fiscal year 2007 for DIRECTV's use on development work during fiscal year 2008. DIRECTV's right to use these deferred fees expired on
January 31, 2008, consequently we recognized these deferred fees as service revenue for the fiscal year ended January 31, 2008. Additionally, beginning in
February 2007, DIRECTV began paying us a monthly fee for all DIRECTV households with DIRECTV receivers with TiVo service similar to the lower
amount paid by DIRECTV for households with DIRECTV receivers with TiVo service deployed since March 15, 2002, subject to a monthly minimum
payment by DIRECTV.
The slight increase in ARPU per month for fiscal year ended January 31, 2009 as compared to the prior fiscal year was largely related to increased
MSOs/Broadcasters'-related advertising revenues coupled with a decline in the average MSOs/Broadcasters' per month subscriptions, as compared to the prior
fiscal year.
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