TiVo-Owned Average Revenue Jul 31, Apr 30, Jan 31, Oct 31, Jul 31, Apr 30, Jan 31, Oct 31, per Subscription 2013 2013 2013 2012 2012 2012 2012 2011 (In thousands, except ARPU) Total Service revenues 34,930 34,062 35,574 35,228 32,302 30,621 31,578 32,413 Less: MSOs'-related service revenues (8,673 ) (8,083 ) (8,374 ) (7,719 ) (5,502 ) (4,086 ) (4,622 ) (4,237 ) TiVo-Owned-related service revenues 26,257 25,979 27,200 27,509 26,800 26,535 26,956 28,176 Average TiVo-Owned revenues per month 8,752 8,660 9,067 9,170 8,933 8,845 8,985 9,392 Average TiVo-Owned subscriptions per month 994 1,018 1,035 1,050 1,068 1,095 1,122 1,149 TiVo-Owned ARPU per month
$ 8.81 $ 8.51 $ 8.76 $ 8.73 $ 8.36 $ 8.08 $ 8.01 $ 8.17The increase in TiVo-Owned ARPU per month for the three months ended July 31, 2013as compared to the same prior year period was due primarily to an increase in our audience research measurement revenues associated with our acquisition of TRA combined with a lower subscription base in the three months ended July 31, 2013as compared to the same prior year period.We calculate ARPU per month for MSOs' 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'-related service revenues by the average MSOs' subscriptions for the period. The 26
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following table shows this calculation:
Three Months Ended MSOs' Average Revenue per Jul 31, Apr 30, Jan 31, Oct 31, Jul 31, Apr 30, Jan 31, Oct 31, Subscription 2013 2013 2013 2012 2012 2012 2012 2011 Total Service revenues 34,930 34,062 35,574
35,228 32,302 30,621 31,578 32,413 Less: TiVo-Owned-related service revenues
(26,257 ) (25,979 ) (27,200 ) (27,509 ) (26,800 ) (26,535 ) (26,956 ) (28,176 ) MSOs'-related service revenues 8,673 8,083 8,374 7,719 5,502 4,086 4,622 4,237 Average MSOs' revenues per month 2,891 2,694 2,791 2,573 1,834 1,362 1,541 1,412 Average MSOs' subscriptions per month 2,514 2,261 2,011 1,771 1,539 1,283 1,049 828 MSOs' ARPU per month
$ 1.15 $ 1.19 $ 1.39 $ 1.45 $ 1.19 $ 1.06 $ 1.47 $ 1.71The MSOs' ARPU per month for the three months ended July 31, 2013decreased by $0.04per subscription to $1.15per subscription, as compared to the same prior year period. While the average MSOs' related service revenues per month have increased by $1.1 millionas compared to the same prior year period, there is also a larger number of average MSOs' subscriptions per month. Some of these recently launched deployment agreements, including Virgin and ONO, which are the primary drivers of our MSO subscription growth, do not necessarily correspond to an increase in service revenues as some of the development costs for these MSO customers, have been deferred on our condensed consolidated balance sheets and such MSO service fees are being first recognized as technology revenues until the previously deferred costs of development related to such MSO customers are fully expensed. This recognition of service fees as technology revenues has had the effect of lowering MSO ARPU per month over the last several quarters and we expect that our MSO ARPU per month will continue to be negatively impacted by the recovery of these previously incurred development costs during fiscal year 2014. However, the negative impact of this recognition of service fees as technology revenues has been offset by the positive impact of DIRECTV's fixed minimum fee commitment (which extends through the term of our agreement with DIRECTV which expires on February 15, 2015, unless extended until February 15, 2018by DIRECTV) being spread over a declining DIRECTV subscription base. Critical Accounting Estimates In preparing our condensed consolidated financial statements, we make assumptions, judgments and estimates that can have a significant impact on our revenue, operating income (loss) and net income (loss), as well as on the value of certain assets and liabilities on our condensed consolidated balance sheets. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. At least quarterly, we evaluate our assumptions, judgments and estimates and make changes accordingly. Historically, our assumptions, judgments and estimates relative to our critical accounting estimates have not differed materially from actual results. Deferred Tax Assets We make certain estimates in determining income tax expense for financial statement purposes. These estimates occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes. From time to time, we evaluate the expected realization of our deferred tax assets and determine whether a valuation allowance needs to be established or released. In determining the need for and amount of our valuation allowance, we assess the likelihood that we will be able to recover our deferred tax assets using historical levels of income and estimates of future income. Our estimates of future income include our internal projections and various internal estimates and certain external sources which we believe to be reasonable but that are unpredictable and inherently uncertain. We also consider the jurisdictional mix of income and loss, changes in tax regulations in the period the changes are enacted and the type of deferred tax assets and liabilities. In assessing whether a valuation allowance needs to be established or released, we use judgment in considering the cumulative effect of negative and positive evidence and the weight given to the potential effect of the evidence. Recent historical income or loss and future projected operational results have the most influence on our determinations of whether a deferred tax valuation allowance is required or not.