Network revenue consists of monthly network broadcast subscription revenue,
which is recognized over the period in which the subscription service is
available. Broadcast television advertising revenue is recognized when
advertisements are aired. Video production revenue is recognized as digital
video film is completed and accepted by the customer and collection is
reasonably assured. And, merchandise revenue is recognized when products are
Revenue from the distribution of domestic television series is recognized as earned using the following criteria:
· Persuasive evidence of an arrangement exists;
· The show/episode is complete, and in accordance with the terms of the
arrangement, has been delivered or is available for immediate and unconditional
· The license period has begun and the customer can begin its exploitation,
exhibition or sale;
· The price to the customer is fixed and determinable; and
· Collectability is reasonably assured.
Due to practical limitations applicable to operating relationships with On-Demand networks, the Company has not considered collectability of advertising or television license revenues to be reasonably assured, and accordingly, the Company has not recognize such revenue unless payment has been received.
Audio/Video content licensing revenues were recognized when the underlying royalties from the sales of the related products were earned. The Company recognized minimum revenue guarantees, if any, ratably over the term of the license or as earned royalties based on actual sales of the related products, if greater.
The Company expenses the cost of advertising and promotions as incurred. Advertising and promotions expense was
Website Development Costs
The Company accounts for website development costs in accordance with ASC 350-50, "Accounting for Website Development Costs" ("ASC 350-50"), wherein website development costs are segregated into three activities:
1) Initial stage (planning), whereby the related costs are expensed. 2) Development (web application, infrastructure, graphics), whereby the related costs are capitalized and amortized once the website is ready for use. Costs for development content of the website may be expensed or capitalized depending on the circumstances of the expenditures. 3) Post-implementation (after site is up and running: security, training, admin), whereby the related costs are expensed as incurred. Upgrades are usually expensed, unless they add additional functionality.
The Company capitalized a total of
Basic and Diluted Loss Per Share
The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an "as if converted" basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For 2012 and 2011, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.