’s 10-Q Reveals Problems in’s 10-Q Reveals Problems in Retaining Annual Subscribers:’s 10-Q second quarter 2002 report has some interesting details on its subscription revenues. These details suggest that the company is having some problems retaining annual subscribers, down to 52 percent of total subscription revenues, from 76 percent in the year-ago quarter (total subs. revenues: $3.65 million compared to $2.09 million in the year-ago quarter). The company, perhaps strangely, attributes it to third party troubles: “Because the Company was entering a new market for subscription products fulfilled via e-mail, and had not established the requisite technological infrastructure, it chose to outsource such fulfillment to a third party until such infrastructure could be developed internally. The decrease in the percent of annual subscriptions is partially due to the third party lacking the technological capability to provide annual subscriptions. The Company migrated these products to its own commerce system in March 2002, has begun to offer annual subscriptions and is attempting to convert these monthly subscribers into annual subscribers.”

Other details: Refunds issued during the quarter totaled approximately 3 percent of gross subscription revenues. Total subscriber base was approximately 78,000 paid annual and monthly subscribers as of June 30, 2002 (not including free trials, but including an estimate of subscribers paid for as part of certain bulk deals), as compared to approximately 76,800 as of June 30, 2001. This increase is primarily the result of the launch of several new subscription-based products, partially offset by a decrease in subscribers attributed to the increase in the subscription price in June 2000.

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