Extended calculations -
Just to clarify: all calculations assume sustained linear growth of subs/month throughout the quarter and the monthly sub increase is based on the only publicly available numbers (KSB2005 & QSB1/2006) where it was stated that the number of subs was 3,000 at the end of October, 6,000 at the end of December and the average number of subs for the 1st Q 2006 was 8,000. Assuming linear growth throughout the period of each quarter 1/2006 & 2/2006 we would end up with the number of subscribers below (for three different cases: sustained growth at Q1 rate, 11% increased growth rate and 26% increased growth rate) and assuming essentially all reported revenue in Q1 was from subscriptions the revenue/subscriber was $16.67 which I then used for revenue projections.
Again, all this is based on assumptions about subscriber growth based on historically stated numbers. So is the projected number of subscribers at the end of each quarter 1 & 2 as that number was not published and is only based on aforementioned assumptions in the interpretation of the published numbers. There is an almost infinite number of scenarios that would result in different numbers of subscribers at the end of each quarter or the average number of subscribers/month for each period. This is just one scenario with the intend to enable a somewhat quick assessment of revenue numbers to be stated in the expected QSB for Q2/2006 and it's consistency with the then presumably stated average number of subscribers for that quarter. I hope this is clear enough as disclaimer!
Here are the numbers:
1) Same growth continued as calculated based on 6,000 subs end of December and an average number of subs of 8,000 for the 1st quarter of 2006 assuming linear growth throughout the period and continued for the 2nd quarter:
sub growth ~1,350/month starting from 6,000 subs:
Jan-March (6,675+8,025+9,375)/3=8,025sub/month ending up with 10,050 subs at the end of March and resulting in the revenue stated as $400,000 translating into $16.67/month/sub or $50/sub/quarter.
Apr-Jun (10,725+12,075+13,425)/3=12,075sub/month ending up with 14,100 subs at the end of June and resulting in revenue of $603,750 based on $16.67/month/sub or $50/sub/quarter.
2) Growth increased by 11% from 1,350 to 1,500 per month for the 2nd quarter vs the 1st quarter:
Apr-Jun (10,800+12,300+13,800)/3=12,300sub/month ending up with 14,550 subs at the end of June and resulting in revenue of $615,000 based on $16.67/month/sub or $50/sub/quarter.
3) Growth increased by 26% from 1,350 to 1,700 per month for the 2nd quarter vs the 1st quarter:
Apr-Jun (10,900+12,600+14,300)/3=12,600sub/month ending up with 15,150 subs at the end of June and resulting in revenue of $630,000 based on $16.67/month/sub or $50/sub/quarter.
If we would end up with anything less than case 1) (sustained growth) it would mean that the average increase in subs/month would have decreased therefore slowing growth which I then would consider somewhat alarming in conjunction with the fact that we added DCs which means increased cost of business.
Again all numbers stated except for the numbers from the KSB & QSB are calculated based on the assumptions for growth stated above.
Enjoy!
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