Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 25, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | RNWK | ||
Entity Registrant Name | REALNETWORKS INC | ||
Entity Central Index Key | 1,046,327 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 36,686,133 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 126 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 47,315 | $ 103,253 |
Short-term investments | 51,814 | 58,453 |
Trade accounts receivable, net of allowances | 22,511 | 15,257 |
Deferred costs, current portion | 460 | 702 |
Deferred tax assets, current portion | 0 | 652 |
Prepaid expenses and other current assets | 7,140 | 8,980 |
Total current assets | 129,240 | 187,297 |
Equipment, software, and leasehold improvements, at cost: | ||
Equipment and software | 66,702 | 74,100 |
Leasehold improvements | 3,122 | 3,590 |
Total equipment, software, and leasehold improvements | 69,824 | 77,690 |
Less accumulated depreciation and amortization | 61,024 | 61,442 |
Net equipment, software, and leasehold improvements | 8,800 | 16,248 |
Restricted cash equivalents and investments | 2,890 | 3,000 |
Investment in Rhapsody | 0 | 10,000 |
Available for sale securities | 1,721 | 2,676 |
Other assets | 2,307 | 2,299 |
Deferred costs, non-current portion | 212 | 316 |
Deferred tax assets, net, non-current portion | 957 | 999 |
Other intangible assets, net | 2,136 | 10,109 |
Goodwill | 13,080 | 17,355 |
Total assets | 161,343 | 250,299 |
Current liabilities: | ||
Accounts payable | 17,050 | 18,653 |
Accrued and other current liabilities | 17,320 | 25,286 |
Deferred tax liabilities, net, current portion | 0 | 1,628 |
Deferred revenue, current portion | 3,497 | 5,301 |
Total current liabilities | 37,867 | 50,868 |
Deferred revenue, non-current portion | 105 | 235 |
Deferred rent | 620 | 1,215 |
Deferred tax liabilities, net, non-current portion | 88 | 702 |
Other long-term liabilities | 1,980 | 81 |
Total liabilities | $ 40,660 | $ 53,101 |
Commitments and contingencies | ||
Preferred stock, $0.001 par value, no shares issued and outstanding: | ||
Common stock, $0.001 par value authorized 250,000 shares; issued and outstanding 36,298 shares in 2015 and 36,099 shares in 2014 | $ 36 | $ 36 |
Additional paid-in capital | 627,316 | 617,756 |
Accumulated other comprehensive loss | (59,480) | (55,252) |
Retained deficit | (447,189) | (365,342) |
Total shareholders’ equity | 120,683 | 197,198 |
Total liabilities and shareholders’ equity | 161,343 | 250,299 |
Preferred stock, Series A | ||
Preferred stock, $0.001 par value, no shares issued and outstanding: | ||
Preferred stock | 0 | 0 |
Preferred stock, Undesignated series | ||
Preferred stock, $0.001 par value, no shares issued and outstanding: | ||
Preferred stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 250,000,000 | 250,000,000 |
Common stock, issued | 36,298,000 | 36,099,000 |
Common stock, outstanding | 36,298,000 | 36,099,000 |
Preferred stock, Series A | ||
Preferred stock, authorized | 200,000 | 200,000 |
Preferred stock, Undesignated series | ||
Preferred stock, authorized | 59,800,000 | 59,800,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Income Statement [Abstract] | ||||||
Net revenue | [1] | $ 125,296 | $ 156,212 | $ 206,196 | ||
Cost of revenue | [2] | 70,297 | 76,381 | 79,091 | ||
Extinguishment of liability | 0 | (10,580) | 0 | |||
Gross profit | 54,999 | 90,411 | 127,105 | |||
Operating expenses: | ||||||
Research and development | 43,626 | 52,765 | 60,880 | |||
Sales and marketing | 48,231 | 66,926 | 80,011 | |||
General and administrative | 24,549 | 34,001 | 36,643 | |||
Restructuring and other charges | 5,279 | 4,992 | 5,765 | |||
Lease exit and related charges | 2,501 | 880 | 3,089 | |||
Loss on litigation settlements | 0 | 0 | 11,525 | |||
Total operating expenses | 124,186 | 159,564 | 197,913 | |||
Operating (loss) income | (69,187) | (69,153) | (70,808) | |||
Other income (expenses): | ||||||
Interest income, net | 680 | 556 | 1,133 | |||
Gain (loss) on sale of equity and other investments, net | (159) | 2,371 | 21,389 | |||
Equity in net loss of Rhapsody investment | (14,521) | (4,452) | (6,268) | |||
Other income (expense), net | 506 | 143 | 467 | |||
Total other income (expenses), net | (13,494) | (1,382) | 16,721 | |||
Income (loss) before income taxes | (82,681) | (70,535) | (54,087) | |||
Income tax expense (benefit) | (834) | 1,280 | 4,903 | |||
Net income (loss) | $ (81,847) | $ (71,815) | $ (58,990) | |||
Basic net income (loss) (in dollars per share) | $ (2.26) | [3] | $ (2) | [3] | $ (1.66) | |
Diluted net income (loss) (in dollars per share) | $ (2.26) | [3] | $ (2) | [3] | $ (1.66) | |
Shares used to compute basic net income (loss) per share | 36,165 | 35,947 | 35,553 | |||
Shares used to compute diluted net income (loss) per share | 36,165 | 35,947 | 35,553 | |||
Comprehensive income (loss): | ||||||
Unrealized investment holding gains (losses), net of reclassification adjustments | $ (955) | $ (4,145) | $ (20,288) | |||
Foreign currency translation adjustments, net of reclassification adjustments | (3,273) | (3,412) | (867) | |||
Total other comprehensive income (loss) | (4,228) | (7,557) | (21,155) | |||
Net income (loss) | (81,847) | (71,815) | (58,990) | |||
Comprehensive income (loss) | $ (86,075) | $ (79,372) | $ (80,145) | |||
[1] | December 31, 2013 December 31, 2012 December 31, 2011Components of Revenue License Fees28,422 28,308 43,709Service Revenue96,874 127,904 162,487Net Revenue125,296 156,212 206,196 | |||||
[2] | December 31, 2012 December 31, 2011 December 31, 2010Components of Cost of Revenue License Fees6,381 8,012 8,538Service Revenue63,916 68,369 70,553Net Revenue Costs70,297 76,381 79,091 | |||||
[3] | The sum of the quarterly net income per share amounts will not necessarily equal net income per share for the year due to the use of weighted average quarterly shares and the effects of rounding. |
CONSOLIDATED STATEMENTS OF OPE5
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Components of net revenue: | ||||
License fees | $ 28,422 | $ 28,308 | $ 43,709 | |
Service revenue | 96,874 | 127,904 | 162,487 | |
Net revenue | [1] | 125,296 | 156,212 | 206,196 |
Components of cost of revenue: | ||||
License fees | 6,381 | 8,012 | 8,538 | |
Service revenue | 63,916 | 68,369 | 70,553 | |
Cost of revenue | [2] | $ 70,297 | $ 76,381 | $ 79,091 |
[1] | December 31, 2013 December 31, 2012 December 31, 2011Components of Revenue License Fees28,422 28,308 43,709Service Revenue96,874 127,904 162,487Net Revenue125,296 156,212 206,196 | |||
[2] | December 31, 2012 December 31, 2011 December 31, 2010Components of Cost of Revenue License Fees6,381 8,012 8,538Service Revenue63,916 68,369 70,553Net Revenue Costs70,297 76,381 79,091 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Cash Flows [Abstract] | |||
Net income (loss) | $ (81,847) | $ (71,815) | $ (58,990) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 10,410 | 11,959 | 18,748 |
Stock-based compensation | 4,698 | 5,204 | 7,468 |
Equity in net loss of Rhapsody | 14,521 | 4,452 | 6,268 |
Lease exit and related charges | 2,501 | 668 | 1,421 |
Deferred income taxes, net | (1,558) | (237) | 676 |
Loss (gain) on sale of available for sale securities | 159 | (2,371) | (21,389) |
Realized translation gain | (264) | (48) | (571) |
Extinguishment of liability | 0 | (10,580) | 0 |
Fair value of warrants, net of mark to market adjustments | (1,053) | 0 | 0 |
Other | 0 | 0 | 51 |
Net change in certain operating assets and liabilities: | |||
Trade accounts receivable | (8,236) | 8,732 | 8,442 |
Deferred costs, prepaid expenses and other assets | 2,606 | 1,982 | 8,112 |
Accounts payable | (465) | (769) | 321 |
Accrued and other liabilities | (10,454) | (7,421) | (20,436) |
Net cash provided by (used in) operating activities | (68,982) | (60,244) | (49,879) |
Cash flows from investing activities: | |||
Purchases of equipment, software, and leasehold improvements | (1,319) | (2,460) | (7,727) |
Proceeds from sale of available for sale securities | 459 | 2,754 | 29,153 |
Purchases of short-term investments | (72,136) | (81,216) | (131,690) |
Proceeds from sales and maturities of short-term investments | 78,775 | 97,683 | 164,986 |
Decrease in restricted cash equivalents and investments | 110 | 0 | 10,000 |
Increase in restricted cash equivalents and investments | 0 | 0 | (3,000) |
Acquisitions, net of cash acquired | (161) | (733) | (22,480) |
Advance to Rhapsody | (5,000) | 0 | 0 |
Repayment from Rhapsody | 5,000 | 0 | 0 |
Proceeds from the sale of Slingo and social casino business | 10,000 | 0 | 0 |
Other | 0 | (467) | 0 |
Net cash provided by (used in) investing activities | 15,728 | 15,561 | 39,242 |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock (stock options and stock purchase plan) | 426 | 812 | 594 |
Tax payments from shares withheld upon vesting of restricted stock | (85) | (407) | (1,201) |
Payment of contingent consideration | 0 | (1,042) | (828) |
Net cash provided by (used in) financing activities | 341 | (637) | (1,435) |
Effect of exchange rate changes on cash and cash equivalents | (3,025) | (2,662) | 109 |
Net increase (decrease) in cash and cash equivalents | (55,938) | (47,982) | (11,963) |
Cash and cash equivalents, beginning of year | 103,253 | 151,235 | 163,198 |
Cash and cash equivalents, end of year | 47,315 | 103,253 | 151,235 |
Supplemental disclosure of cash flow information: | |||
Cash received from income tax refunds | 1,102 | 654 | 8,405 |
Cash paid for income taxes | 1,491 | 1,882 | 4,600 |
Non-cash investing activities: | |||
Increase (decrease) in accrued purchases of equipment, software, and leasehold improvements | (150) | (297) | 335 |
Acquisition of intangible assets | $ 102 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND NONCONTROLLING INTEREST - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Deficit) |
Balances at Dec. 31, 2012 | $ 342,728 | $ 35 | $ 603,770 | $ (26,540) | $ (234,537) |
Balances (shares) at Dec. 31, 2012 | 35,324 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issued for exercise of stock options, employee stock purchase plan, and vesting of restricted shares, net of tax payments from shares withheld upon vesting of restricted stock | (607) | $ 1 | (608) | ||
Common stock issued for exercise of stock options, employee stock purchase plan, and vesting of restricted shares, net of tax payments from shares withheld upon vesting of restricted stock (shares) | 509 | ||||
Share of Rhapsody equity transactions | (463) | (463) | |||
Stock-based compensation | 7,468 | 7,468 | |||
Other comprehensive income (loss) | (21,155) | (21,155) | |||
Net income (loss) | (58,990) | (58,990) | |||
Balances at Dec. 31, 2013 | 268,981 | $ 36 | 610,167 | (47,695) | (293,527) |
Balances (shares) at Dec. 31, 2013 | 35,833 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issued for exercise of stock options, employee stock purchase plan, and vesting of restricted shares, net of tax payments from shares withheld upon vesting of restricted stock | 405 | $ 0 | 405 | ||
Common stock issued for exercise of stock options, employee stock purchase plan, and vesting of restricted shares, net of tax payments from shares withheld upon vesting of restricted stock (shares) | 266 | ||||
Share of Rhapsody equity transactions | 1,980 | 1,980 | |||
Stock-based compensation | 5,204 | 5,204 | |||
Other comprehensive income (loss) | (7,557) | (7,557) | |||
Net income (loss) | (71,815) | (71,815) | |||
Balances at Dec. 31, 2014 | 197,198 | $ 36 | 617,756 | (55,252) | (365,342) |
Balances (shares) at Dec. 31, 2014 | 36,099 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issued for exercise of stock options, employee stock purchase plan, and vesting of restricted shares, net of tax payments from shares withheld upon vesting of restricted stock | 341 | $ 0 | 341 | ||
Common stock issued for exercise of stock options, employee stock purchase plan, and vesting of restricted shares, net of tax payments from shares withheld upon vesting of restricted stock (shares) | 199 | ||||
Share of Rhapsody equity transactions | 4,521 | 4,521 | |||
Stock-based compensation | 4,698 | 4,698 | |||
Other comprehensive income (loss) | (4,228) | (4,228) | |||
Net income (loss) | (81,847) | (81,847) | |||
Balances at Dec. 31, 2015 | $ 120,683 | $ 36 | $ 627,316 | $ (59,480) | $ (447,189) |
Balances (shares) at Dec. 31, 2015 | 36,298 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Note 1. Description of Business and Summary of Significant Accounting Policies Description of Business. RealNetworks, Inc. and subsidiaries is a leading global provider of network-delivered digital media applications and services that make it easy to manage, play and share digital media. The Company also develops and markets software products and services that enable the creation, distribution and consumption of digital media, including audio and video. Inherent in our business are various risks and uncertainties, including a limited history of certain of our product and service offerings. RealNetworks' success will depend on the acceptance of our technology, products and services and the ability to generate related revenue. In this Annual Report on Form 10-K for the year ended December 31, 2015 (10-K), RealNetworks, Inc. and subsidiaries is referred to as “RealNetworks”, the “Company”, “we”, “us”, or “our”. Basis of Presentation. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations for the periods presented. Operating results for the year ended December 31, 2015 are not necessarily indicative of the results that may be expected for any subsequent periods. Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents, Short-Term Investments, and Available-for-Sale Securities. We consider all short-term investments with a remaining contractual maturity at date of purchase of three months or less to be cash equivalents. We have classified as available-for-sale all marketable debt and equity securities for which there is determinable fair market value and there are no restrictions on our ability to sell. Available-for-sale securities are carried at fair value with unrealized gains and losses reported in accumulated other comprehensive income (loss) (AOCI) in shareholders' equity, net of any applicable income taxes. Investments with remaining contractual maturities of five years or less are classified as short-term because the investments are marketable and highly liquid, and we have the ability to utilize them for current operations. Realized gains and losses and declines in value judged to be other-than-temporary on available-for-sale securities are included in other income (expense), net. Realized and unrealized gains and losses on available-for-sale securities are determined using the specific identification method. Trade Accounts Receivable. Trade accounts receivable consist of amounts due from customers and do not bear interest. The allowance for doubtful accounts and sales returns is our estimate of the amount of probable credit losses and returns in our existing accounts receivable. We determine the allowances based on analysis of historical bad debts, customer concentrations, customer credit-worthiness, return history and current economic trends. We review the allowances for doubtful accounts and sales returns quarterly. Past due balances over 90 days and specified other balances are reviewed individually for collectability. All other balances are reviewed on an aggregate basis. Account balances are written off against the allowance after all reasonable means of collection have been exhausted and the potential for recovery is considered remote. We do not have any off-balance sheet credit exposure related to our customers. Concentration of Credit Risk. Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, and accounts receivable. Short-term investments consist of U.S. government and government agency securities, corporate notes and bonds, and municipal securities. We derive a portion of our revenue from a large number of individual consumers spread globally. We also derive revenue from several large customers. If the financial condition or results of operations of any one of the large customers deteriorates substantially, our operating results could be adversely affected. To reduce credit risk, management performs ongoing credit evaluations of the financial condition of significant customers. We do not generally require collateral and we maintain an allowance for estimated credit losses on customer accounts when considered necessary. Depreciation and Amortization. Depreciation of equipment and software, as well as amortization of leasehold improvements is computed using the straight-line method over the lesser of the estimated useful lives of the assets or the related lease term. The useful life of equipment and software is generally three to five years. Depreciation and amortization expense of these assets during the years ended December 31, 2015 , 2014 , and 2013 was $8.1 million , $8.5 million , and $14.3 million , respectively. Equity Method Investment. We use the equity method in circumstances where we have the ability to exert significant influence, but not control, over an investee or joint venture. We initially record our investment based on a fair value analysis of the investment. We record our percentage interest in the investee's recorded income or loss and changes in the investee's capital under this method, which will increase or decrease the reported value of our investment. See Note 4, Rhapsody Joint Venture, to the audited consolidated financial statements included in Item 8 of this 10-K, for additional information. We evaluate impairment of an investment accounted for under the equity method if events and circumstances warrant. An impairment charge would be recorded if a decline in the fair value of an equity investment below its carrying amount were determined to be other than temporary. In determining if a decline is other than temporary, we consider factors such as the length of time and extent to which the fair value of the investment has been less than the carrying amount of the investee or joint venture, the near-term and longer-term operating and financial prospects of the investee or joint venture and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery. Deferred Costs. We defer certain costs on projects for service revenues and system sales. Deferred costs consist primarily of direct and incremental costs to customize and install systems, as defined in individual customer contracts, including costs to acquire hardware and software from third parties and payroll and related costs for employees and other third parties. Deferred costs are capitalized during the implementation period. We recognize such costs as a component of cost of revenue, the timing of which is dependent upon the revenue recognition policy by contract. At each balance sheet date, we review deferred costs to ensure they are ultimately recoverable. Any anticipated losses on uncompleted contracts are recognized when evidence indicates the estimated total cost of a contract exceeds its estimated total revenue or if actual deferred costs exceed estimated contractual revenue. Assessing the recoverability of deferred costs is based on significant assumptions and estimates, including future revenue and cost of sales. Significant or sustained decreases in revenue or increases in cost of sales in future periods could result in impairments of deferred project costs and prepaid royalty advances. We cannot accurately predict the amount and timing of any such impairments. Should deferred project costs or prepaid royalty advances become impaired, we would record the appropriate charge, which could have a material adverse effect on our financial condition and results of operations. As of December 31, 2014, we determined that the total estimated costs associated with a project exceeded the total estimated revenues expected to be recognized on that project. As a result, we impaired $0.7 million in deferred project costs. This charge was included in cost of revenue in the accompanying consolidated statements of operations and comprehensive income (loss). No such charges were incurred in 2015 or 2013. Definite-Lived Tangible and Intangible Assets. Definite-lived tangible assets include equipment, software and leasehold improvements and are carried at cost less accumulated depreciation and amortization. Definite-lived intangible assets consist primarily of the fair value of customer agreements and contracts, and developed technology acquired in business combinations and are amortized over their estimated useful lives. We review these assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. If the carrying amount of an asset group is not recoverable, an impairment loss is recognized if the carrying amount of the asset group exceeds its estimated fair value, which is generally determined as the present value of estimated future cash flows to a market participant. Our impairment analysis is based on significant assumptions of future results, including operating and cash flow projections. Significant or sustained declines in future revenue or cash flows, or adverse changes in our business climate, among other factors, could result in the need to record an impairment charge in future periods. Goodwill. We test goodwill for impairment on an annual basis, in our fourth quarter, or more frequently if circumstances indicate reporting unit carrying values may exceed their fair values. Circumstances that may indicate a reporting unit's carrying value exceeds its fair value include, but are not limited to: poor economic performance relative to historical or projected future operating results; significant negative industry, economic or company specific trends; changes in the manner of our use of the assets or the plans for our business; and loss of key personnel. When evaluating goodwill for impairment, based upon our annual test or due to changes in circumstances described above, we first perform a qualitative assessment to determine if the fair value of a reporting unit is more likely than not less than the reporting unit's carrying amount including goodwill. If this assessment indicates it is more likely than not, we then compare the carrying value of the reporting unit to the estimated fair value of the reporting unit. If the carrying value of the reporting unit exceeds the estimated fair value, we then calculate the implied estimated fair value of goodwill for the reporting unit and compare it to the carrying amount of goodwill for the reporting unit. If the carrying amount of goodwill exceeds the implied estimated fair value, an impairment charge to current operations is recorded to reduce the carrying value to implied estimated value. Significant judgment is required in determining the reporting units and assessing fair value of the reporting units. Indefinite-Lived Intangible Assets. We evaluate indefinite-lived intangible assets (primarily tradenames and trademarks) for impairment on an annual basis, in the fourth quarter, or more frequently if an event occurs or changes in circumstances indicate that impairment may exist. When evaluating indefinite-lived intangible assets for impairment, we may first perform a qualitative assessment to determine if the fair value of the intangible assets is more likely than not greater than its carrying amount. If we do not perform a qualitative assessment or if the fair value of the intangible assets is not more likely than not greater than its carrying amount, we estimate the fair value of the intangible assets. If the carrying amount of the intangible assets exceeds the estimated fair value, an impairment charge is recorded to reduce the carrying value to the estimated fair value. Significant judgment is required in assessing fair value of the indefinite-lived intangible assets. With the sale of our Slingo and social casino game business in 2015 as described in more detail in Note 3. Acquisitions and Disposals , we had no indefinite-lived intangible assets at December 31, 2015. Fair Value. Fair value is the price that would be received from selling an asset or paid in transfering a liability in an orderly transaction between market participants at the measurement date. Our fair value measurements consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. Fair values are determined based on three levels of inputs: • Level 1: Quoted prices in active markets for identical assets or liabilities • Level 2: Directly or indirectly observed inputs for the asset or liability, including quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active • Level 3: Significant unobservable inputs that reflect our own estimates of assumptions that market participants would use Research and Development. Costs incurred in research and development are expensed as incurred. Software development costs are capitalized when a product’s technological feasibility has been established through the date the product is available for general release to customers. Other than internal use software, we have not capitalized any software development costs, as technological feasibility is generally not established until a working model is completed, at which time substantially all development is complete. Revenue Recognition. We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable. Physical products are considered delivered to the customer once they have been shipped and title and risk of loss have been transferred. For online sales, the products or services are considered delivered at the time the products or services are made available, digitally, to the end user. We recognize revenue on a gross or net basis. In most arrangements, we contract directly with end user customers, and are the primary obligor. In such arrangements, we recognize revenue on a gross basis. In some cases, we utilize third-party distributors who are the primary obligor to sell products or services directly to end user customers. In such instances, we recognize revenue on a net basis. In our direct to consumer operations, we derive revenue through (1) subscriptions of our SuperPass and Real Player Cloud products within our RealPlayer Group segment and subscriptions sold by our Games segment, (2) sales of content downloads, software and licenses offered by our RealPlayer Group, Mobile Entertainment, and Games segments and (3) the sale of advertising and the distribution of third-party products on our websites and in our games. Consumer subscription products are paid in advance, typically for monthly, quarterly or annual duration. Subscription revenue is recognized ratably over the related subscription time period. Revenue from sales of content downloads, software and licenses is recognized at the time the product is made available, digitally, to the end user. Revenue generated from advertising on our websites and from advertising and the distribution of third-party products included in our products is recognized as revenue at the time of delivery. We also generate revenue through business-to-business channels by providing services within our Mobile Entertainment segment enabling mobile carriers to deliver audio and video content to their customers and by selling software licenses and products and related support and other services. Revenue generated from services provided to mobile carriers that enable the delivery of audio and video content to their customers is recognized as the services are provided. Setup fees to build these services are recognized ratably upon launch of the service over the remaining expected term of the service. Non-software revenue arrangements containing multiple elements are divided into separate units of accounting, after being evaluated for specific criteria. If the criteria for separation are met, revenue is allocated to the individual units using the relative fair value method. If the criteria are not met, the elements are treated as one unit of accounting and revenue recognition is delayed until all elements have been delivered. In the case of revenue arrangements containing software, elements are divided into separate units of accounting only when vendor-specific objective evidence has been established. In cases where vendor-specific objective evidence has not been established, undelivered elements are combined into one unit of accounting and are not recognized in revenue until all elements have been delivered. Advertising Expenses. We expense the cost of advertising and promoting our products as incurred. These costs are included in sales and marketing expense and totaled $16.5 million in 2015 , $23.1 million in 2014 and $30.6 million in 2013 . Foreign Currency. The functional currency of the Company’s foreign subsidiaries is the currency of the country in which the subsidiary operates. Assets and liabilities of foreign operations are translated into U.S. dollars using rates of exchange in effect at the end of the reporting period. The net gain or loss resulting from translation is shown as translation adjustment and included in AOCI in shareholders’ equity. Income and expense accounts are translated into U.S. dollars using average rates of exchange. Gains and losses from foreign currency transactions are included in the consolidated statements of operations. Derivative Financial Instruments. We conduct business internationally in several currencies and thus we are exposed to adverse movements in foreign currency exchange rates. A portion of these risks may be managed through the use of financial derivatives, but fluctuations in foreign exchange rates could impact our results of operations and financial position. Where appropriate, we manage foreign currency risk for certain material short-term intercompany balances through the use of foreign currency forward contracts. These contracts require us to exchange currencies at rates agreed upon at the contract’s inception. Because the impact of movements in currency exchange rates on forward contracts offsets the related impact on the short-term intercompany balances, these financial instruments help alleviate the risk that might otherwise result from certain changes in currency exchange rates. We do not designate foreign exchange forward contracts related to short-term intercompany accounts as hedges and, accordingly, we adjust these instruments to fair value through our results of operations. However, we may periodically hedge a portion of our foreign exchange exposures associated with material firmly committed transactions and long-term investments. All derivatives, whether designated in hedging relationships or not, are recorded on the balance sheet at fair value. If the derivative is designated a hedge, then depending on the nature of the hedge, changes in fair value will either be recorded immediately in results of operations, or be recognized in AOCI until the hedged item is recognized in results of operations. We had nominal amounts of derivatives outstanding at either December 31, 2015 or 2014 . Accounting for Taxes Collected from Customers. Our revenues are reported net of sales and other transaction taxes that are collected from customers and remitted to taxing authorities. Income Taxes. We compute income taxes using the asset and liability method, under which deferred income taxes are provided for temporary differences between financial reporting basis and tax basis of our assets and liabilities and operating loss and tax credit carryforwards. We record a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets depends on the ability to generate sufficient taxable income of the appropriate character in the appropriate taxing jurisdictions. Adjustments to the valuation allowance could be required in the future if we estimate that the amount of deferred tax assets to be realized is more or less than the net amount we have recorded. Any increase or decrease in the valuation allowance could have the effect of increasing or decreasing the income tax provision in the statement of operations. Deferred tax assets and liabilities and operating loss and tax credit carryforwards are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and operating loss and tax credit carryforwards are expected to be recovered or settled. We file numerous consolidated and separate income tax returns in the U.S. including federal, state and local, as well as foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal income tax examinations for tax years before 2013 or state, local, or foreign income tax examinations for years before 1993. We are currently under audit by various states and foreign jurisdictions for certain tax years subsequent to 1993. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. We recognize accrued interest and penalties related to uncertain tax positions as a component of income tax expense. Stock-Based Compensation. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is the vesting period. We use the Black-Scholes option-pricing model or other appropriate valuation models such as Monte Carlo simulation to determine the fair value of stock-based option awards. The fair value of restricted stock awards is based on the closing market price of our common stock on the award date. Generally, we recognize the compensation cost for awards on a straight-line basis for the entire award, over the applicable vesting period. For performance-based awards, expense is recognized when it is probable the performance goal will be achieved, however if the likelihood becomes improbable, that expense is reversed. For market-based stock options, fair value is measured at the grant date using the Monte Carlo simulation model and we recognize compensation cost for these awards on a straight-line basis over the requisite service period for each separately vesting portion of the awards. For our employee stock purchase plan, compensation expense is measured based on the discount the employee is entitled to upon purchase. The valuation models for stock-based option awards require various highly judgmental assumptions including volatility in our common stock price and expected option life. If any of the assumptions used in the valuation models change significantly, stock-based compensation expense for new awards may differ materially in the future from the amounts recorded in the consolidated statements of operations. For all awards, we also estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. Net Income Per Share. Basic net income (loss) per share (EPS) is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) by the weighted average number of common and dilutive potential common shares outstanding during the period. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note 2. Recent Accounting Pronouncements In August 2014, the Financial Accounting Standards Board (FASB) issued a new standard, "Disclosure of Uncertainties About an Entity's Ability to Continue as a Going Concern". This standard provides guidance around management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. The new guidance is effective for all annual and interim periods ending after December 15, 2016. We are currently evaluating the impact, if any, the adoption of this standard will have on our consolidated financial statements. In May 2014, the FASB issued new revenue recognition guidance. The guidance will require an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The new guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new guidance is effective for us on January 1, 2018; with early adoption permitted beginning January 1, 2017. The guidance permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that the guidance will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor determined the effect of the standard on our ongoing financial reporting. In November 2015, the FASB issued new guidance related to the presentation of deferred income taxes, requiring that deferred tax assets and liabilities be classified as non-current on the balance sheet. The new guidance will be effective for us on January 1, 2017, including interim periods within 2017. As permitted, we have elected to early adopt the new guidance, and have reclassified our net current deferred tax assets and liabilities to net non-current deferred tax assets and liabilities in our Consolidated Balance Sheet as of December 31, 2015. As permitted, we have not retrospectively adjusted prior year amounts. In February 2016, the FASB issued new guidance related to the accounting for leases by lessees. A major change in the new guidance is that lessees will be required to present right-of-use assets and lease liabilities on the balance sheet. The new guidance will be effective for us on January 1, 2019, including interim periods within 2019. We will be evaluating the effect that the guidance will have on our consolidated financial statements and related disclosures. There have been no other recent accounting pronouncements or changes in accounting pronouncements to be implemented that are of significance or potential significance to RealNetworks. |
Acquisitions and Disposals
Acquisitions and Disposals | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Acquisitions and Disposals | Note 3. Acquisitions and Disposals 2013 Purchase of Slingo, Inc. In the quarter ended June 30, 2013, we acquired 100% of the voting interests in Slingo, Inc., a social casino games company based in the U.S., for total cash consideration of $15.6 million . The tangible and intangible assets and liabilities recognized were reported within the Games segment. The identifiable intangible assets associated with the acquisition totaled $8.0 million . Of this total, $4.5 million was related to tradenames and trademarks determined to have indefinite useful lives and $3.5 million included developed game technology and existing customer relationships, amortized over their estimated useful lives. We recorded a net deferred tax liability of $2.7 million related to the intangible assets acquired. Goodwill totaling $9.9 million was recorded, representing the excess of purchase consideration over the fair value of net acquired assets, and was primarily related to the assembled workforce and expected synergies in the rapidly growing social casino games market. The goodwill is not deductible for income tax purposes. 2013 Purchase of Muzicall Ltd. In the quarter ended September 30, 2013, we acquired 100% of the voting interests in Muzicall Limited, a ringback tone company based in London, for total cash consideration of $6.7 million . The tangible and intangible assets and liabilities recognized are reported in the Mobile Entertainment segment. The identifiable intangible assets associated with the acquisition totaled $5.4 million , and include tradenames and trademarks, developed technology, user base and carrier relationships. All identifiable intangible assets from this acquisition are being amortized over their estimated useful lives. We recorded a net deferred tax asset of $3.4 million related to the assets acquired, and a full valuation allowance. Goodwill totaling $1.3 million was recorded, representing the excess of purchase consideration over the fair value of net acquired assets, and was primarily related to the assembled workforce and expected synergies in the ringback tone industry. The goodwill is not deductible for income tax purposes. This acquisition has helped us accelerate our growth initiatives within the Mobile Entertainment segment. 2015 Sale of Slingo and social casino business. On July 24, 2015, we entered into an agreement to sell the Slingo and social casino portion of our games business to Gaming Realms plc for $18.0 million . Of this amount, $10.0 million of the total consideration was paid in cash at closing and the remaining $8.0 million will be payable either all in cash or a mix of cash and Gaming Realms plc stock, at our election, on the first and second anniversaries of the closing. The transaction closed on August 10, 2015. With the transaction, Gaming Realms plc assumed the operations of our Slingo and social casino businesses, including substantially all of the related assets and liabilities, as well as the stock of Backstage Technologies Incorporated. The disposed assets and liabilities consisted of intangible assets of $5.7 million , net property, plant and equipment of $0.3 million , and other net assets of $0.4 million , as well as a deferred tax liability of $1.6 million related to the indefinite-lived Slingo trade name, which is included as part of the intangible assets disposed of in the sale. Goodwill totaling $3.6 million was also disposed as part of the transaction based on the relative fair values of the business disposed of and the portion of the games reporting unit retained. As this sale did not represent a strategic shift in our business and we do not believe it will have a major impact on our future operations and financial results, it did not meet the criteria for discontinued operations under GAAP. As such, we have recorded the related foreign currency gain of $0.5 million in Other income and expense on the consolidated statement of operations. In addition, we have recognized an income tax benefit of $1.6 million from the reversal of a Slingo deferred tax liability as described above. Based on several factors, including the timing of the receipt of the remaining $8.0 million consideration, we have deferred the remaining gain of $8.0 million and will recognize that gain upon realization. |
Rhapsody Joint Venture
Rhapsody Joint Venture | 12 Months Ended |
Dec. 31, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Rhapsody Joint Venture | Note 4. Rhapsody Joint Venture As of December 31, 2015 we owned approximately 43% of the issued and outstanding stock of Rhapsody and account for our investment using the equity method of accounting. Rhapsody was initially formed in 2007 as a joint venture between RealNetworks and MTV Networks, a division of Viacom International Inc. (MTVN), to own and operate a business-to-consumer digital audio music service known as Rhapsody. Following certain restructuring transactions effective March 31, 2010, we began accounting for our investment in Rhapsody using the equity method of accounting. As part of the 2010 restructuring transactions, RealNetworks contributed $18.0 million in cash, the Rhapsody brand and certain other assets, including content licenses, in exchange for shares of convertible preferred stock of Rhapsody, carrying a $10.0 million preference upon certain liquidation events. We recorded our share of losses of Rhapsody of $14.5 million , $4.5 million , and $6.3 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Because of the $10.0 million liquidation preference on the preferred stock we hold in Rhapsody, under the equity method of accounting we did not record any share of Rhapsody losses that would reduce our carrying value of Rhapsody, which is impacted by Rhapsody equity transactions, below $10.0 million , until Rhapsody's book value was reduced below $10.0 million which occurred in the first quarter of 2015. As of December 31, 2015, the carrying value of our Rhapsody equity investment was zero , as we do not record any share of Rhapsody losses that would reduce our carrying value of Rhapsody below zero unless we commit to provide financial support for Rhapsody. The carrying value of our Rhapsody investment was $10.0 million at December 31, 2014 . In March 2015, RealNetworks extended a $5.0 million loan to Rhapsody, as did the other 43% owner of Rhapsody. The loans had original maturity dates of June 2018, or earlier, if Rhapsody's certain loan to an external strategic partner was repaid in full. The loans to Rhapsody bore interest at the greater of prime plus 5.25% or 9% per annum. During 2015, Rhapsody's external strategic partner repaid its loan to Rhapsody and Rhapsody then repaid its loan to us and the other 43% owner in full. Under the loan, Rhapsody paid us approximately $0.2 million of interest in 2015. Summarized financial information for Rhapsody, which represents 100% of their financial information, is as follows (in thousands): Year ended December 31, Year ended December 31, Year ended December 31, Net revenue $ 201,987 $ 173,484 $ 140,596 Gross profit 32,761 32,145 34,141 Net loss (35,479 ) (21,336 ) (14,663 ) As of December 31, 2015 As of December 31, 2014 Current assets $ 53,274 $ 47,021 Non-current assets 20,520 20,616 Current liabilities 92,794 65,458 Non-current liabilities 20,295 16,487 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 5. Fair Value Measurements Items Measured at Fair Value on a Recurring Basis The following tables present information about our financial assets that have been measured at fair value on a recurring basis as of December 31, 2015 and 2014 , and indicates the fair value hierarchy of the valuation inputs utilized to determine fair value (in thousands). Fair Value Measurements as of Amortized Cost as of December 31, 2015 December 31, 2015 Level 1 Level 2 Level 3 Total Cash and cash equivalents: Cash $ 23,152 $ — $ — $ 23,152 $ 23,152 Money market funds 5,061 — — 5,061 5,061 Corporate notes and bonds — 19,102 — 19,102 19,102 Total cash and cash equivalents 28,213 19,102 — 47,315 47,315 Short-term investments: Corporate notes and bonds — 51,814 — 51,814 51,862 Total short-term investments — 51,814 — 51,814 51,862 Restricted cash equivalents and investments — 2,890 — 2,890 2,890 Equity investments in publicly traded securities 1,721 — — 1,721 362 Warrant issued by Rhapsody (included in Other assets) — — 1,053 1,053 — Total $ 29,934 $ 73,806 $ 1,053 $ 104,793 $ 102,429 Fair Value Measurements as of Amortized Cost as of December 31, 2014 December 31, 2014 Level 1 Level 2 Level 3 Total Cash and cash equivalents: Cash $ 30,105 $ — $ — $ 30,105 $ 30,105 Money market funds 11,629 — — 11,629 11,630 Corporate notes and bonds — 61,519 — 61,519 61,520 Total cash and cash equivalents 41,734 61,519 — 103,253 103,255 Short-term investments: Corporate notes and bonds — 51,453 — 51,453 51,438 U.S. government agency securities 7,000 — — 7,000 7,000 Total short-term investments 7,000 51,453 — 58,453 58,438 Restricted cash equivalents and investments — 3,000 — 3,000 3,000 Equity investments in publicly traded securities 2,676 — — 2,676 428 Total $ 51,410 $ 115,972 $ — $ 167,382 $ 165,121 Restricted cash equivalents and investments as of December 31, 2015 and 2014 relate to cash pledged as collateral against letters of credit in connection with lease agreements. Realized gains or losses on sales of short-term investment securities for 2015 , 2014 , and 2013 were not significant. Gross unrealized gains and gross unrealized losses on short-term investment securities as of December 31, 2015 and 2014 were not significant. Investments with remaining contractual maturities of five years or less are classified as short-term because the investments are marketable and highly liquid, and we have the ability to utilize them for current operations. Contractual maturities of short-term investments as of December 31, 2015 are as follows (in thousands): Estimated Fair Value Within one year $ 51,389 Between one year and five years 425 Total short-term investments $ 51,814 Our equity investment in a publicly traded company as of December 31, 2015 and 2014 consisted of J-Stream Inc., a Japanese media services company. This equity investment is accounted for as available for sale. In 2015, we sold a portion of the J-Stream shares we held, resulting in cash proceeds of $0.5 million and a pre-tax gain of $0.4 million , reported in Other income (expense), net, in the consolidated statement of operations. In 2014, we sold a portion of the J-Stream shares we held, resulting in cash proceeds of $2.8 million and a pre-tax gain of $2.4 million . In 2013 we sold shares of common stock in LoEn Entertainment, Inc., a Korean digital music distribution company, resulting in cash proceeds of $29.2 million , net of transaction costs, and a total pre-tax gain of $21.4 million . In February 2015, Rhapsody issued warrants to purchase Rhapsody common shares to each of RealNetworks and Rhapsody's one other 43% stockholder. The warrants were issued as compensation for past services provided by RealNetworks and the other 43% stockholder, and both warrants covered the same number of underlying shares. The exercise price of the warrants was equal to the fair value of the underlying shares on the issuance date, and we used the Black-Scholes option-pricing model to calculate the fair value of the warrant, using an expected term of 5 years and expected volatility of 55% . On the date of issuance, we recognized and recorded the $1.2 million fair value of the warrant issued to RealNetworks within Other assets in the consolidated balance sheets, and as an expense reduction within General and administrative expense in the consolidated statements of operations. The warrants are free-standing derivatives and as such their fair value is determined each quarter using updated inputs in the Black-Scholes option-pricing model. During the twelve months ended December 31, 2015 the decrease in the fair value of the warrants from that originally recorded was approximately $0.1 million Items Measured at Fair Value on a Non-recurring Basis Certain of our assets and liabilities are measured at estimated fair value on a non-recurring basis, using Level 3 inputs. These instruments are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). We did not record any impairments on those assets required to be measured at fair value on a non-recurring basis in 2015 , 2014 or 2013 . See Note 11. Lease Exit and Related Charges , for a discussion of the losses related to reductions in the use of RealNetworks' office space, which were recorded at the estimated fair value of remaining lease obligations, less expected sub-lease income. |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts Receivable and Sales Returns | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Allowance for Doubtful Accounts Receivable and Sales Returns | Note 6. Allowance for Doubtful Accounts Receivable and Sales Returns Activity in the allowance for doubtful accounts receivable (in thousands): Years ended December 31, 2015 2014 2013 Balance, beginning of year $ 1,288 $ 966 $ 1,010 Addition (reduction) to allowance (355 ) 433 (2 ) Amounts written off (77 ) — (83 ) Effects of foreign currency translation (91 ) (111 ) 41 Balance, end of year $ 765 $ 1,288 $ 966 Activity in the allowance for sales returns (in thousands): Years ended December 31, 2015 2014 2013 Balance, beginning of year $ 354 $ 569 $ 653 Addition (reduction) to allowance (186 ) (209 ) (64 ) Amounts written off (9 ) (6 ) (21 ) Effects of foreign currency translation (1 ) — 1 Balance, end of year $ 158 $ 354 $ 569 Total, Allowance for Doubtful Accounts Receivable and Sales Returns $ 923 $ 1,642 $ 1,535 One customer accounted for 52% and one other customer accounted for 12% of trade accounts receivable as of December 31, 2015 . One customer accounted for 21% and one other customer accounted for 15% of trade accounts receivable as of December 31, 2014 . One customer accounted for approximately 26% or $32.9 million , of consolidated revenue during the year ended December 31, 2015 , in our Mobile Entertainment segment. One customer accounted for 20% , or $31.9 million , of consolidated revenue during the year ended December 31, 2014 , in our Mobile Entertainment segment. One customer accounted for 13% , or $27.0 million , of consolidated revenue during the year ended December 31, 2013 , in our RealPlayer and Games segments. One other customer accounted for 13% , or $26.4 million , of consolidated revenue during the year ended December 31, 2013, in our Mobile Entertainment segment. |
Other Intangible Assets
Other Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | Note 7. Other Intangible Assets Other intangible assets (in thousands): As of December 31, 2015 2014 Gross Amount Accumulated Amortization Net Gross Amount Accumulated Amortization Net Amortizing intangible assets: Customer relationships $ 30,182 $ 29,236 $ 946 $ 33,853 $ 31,643 $ 2,210 Developed technology 24,047 23,244 803 28,261 25,699 2,562 Patents, trademarks and tradenames 3,717 3,398 319 3,817 3,528 289 Service contracts 5,269 5,201 68 6,312 5,764 548 63,215 61,079 2,136 72,243 66,634 5,609 Non-amortizing intangible assets: Trademarks and tradenames — — — 4,500 — 4,500 Total $ 63,215 $ 61,079 $ 2,136 $ 76,743 $ 66,634 $ 10,109 As discussed in Note 3. Acquisitions and Disposals , $5.7 million worth of intangible assets, net, related to the third quarter 2015 sale of our Slingo and social casino portion of our games business, were disposed. Amortization expense related to other intangible assets during the years ended December 31, 2015 , 2014 , and 2013 was $2.3 million , $3.4 million , and $4.4 million , respectively. Estimated future amortization of other intangible assets (in thousands): 2016 $ 1,096 2017 686 2018 354 Total $ 2,136 No impairments of other intangible assets were recognized in 2015 , 2014 or 2013 . |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 8. Goodwill Changes in goodwill (in thousands): December 31, 2015 2014 Balance, beginning of year Goodwill $ 328,008 $ 328,129 Accumulated impairment losses (310,653 ) (310,653 ) 17,355 17,476 Increases (decreases) due to current year acquisitions (disposals) (3,620 ) 460 Effects of foreign currency translation (655 ) (581 ) (4,275 ) (121 ) Balance, end of year Goodwill 323,733 328,008 Accumulated impairment losses (310,653 ) (310,653 ) $ 13,080 $ 17,355 Goodwill by segment (in thousands): December 31, 2015 2014 RealPlayer Group $ 945 $ 985 Mobile Entertainment 1,837 1,976 Games 10,298 14,394 Total goodwill $ 13,080 $ 17,355 As discussed in Note 3. Acquisitions and Disposals , $3.6 million of goodwill was disposed of in the third quarter 2015 sale of our Slingo and social casino portion of our games business. In the second quarter of 2014, an acquisition of a business related to our RealPlayer Group resulted in goodwill of $0.5 million being recorded. No impairments of goodwill were recorded in 2015 , 2014 , or 2013 . |
Accrued and Other Current Liabi
Accrued and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Accrued and Other Current Liabilities | Note 9. Accrued and Other Current Liabilities Accrued and other current liabilities (in thousands): December 31, 2015 December 31, 2014 Royalties and other fulfillment costs $ 3,094 $ 4,868 Employee compensation, commissions and benefits 5,958 7,711 Sales, VAT and other taxes payable 2,976 5,896 Other 5,292 6,811 Total accrued and other current liabilities $ 17,320 $ 25,286 |
Restructuring Charges
Restructuring Charges | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Note 10. Restructuring Charges Restructuring and other charges in 2015 , 2014 and 2013 consist of costs associated with the ongoing reorganization of our business operations and our ongoing expense re-alignment efforts. The expense amounts in all three years primarily relate to severance costs due to workforce reductions and are classified as Employee Separation Costs in the table below. We also incurred restructuring charges during 2013 related to the relocation of our Seattle headquarters totaling $1.8 million , which is classified as Asset Related and Other Costs in the table below. For details on other costs associated with the termination of our Seattle headquarters lease see Note 11. Lease Exit and Related Charges . Details of restructuring charges for the years ended December 31, 2015 , 2014 , and 2013 (excluding non-cash charges) are shown in the table below (in thousands): By Type of Cost Employee Separation Costs Asset Related and Other Costs Total Costs incurred and charged to expense for the year ended December 31, 2015 $ 5,279 $ — $ 5,279 Costs incurred and charged to expense for the year ended December 31, 2014 $ 4,992 $ — $ 4,992 Costs incurred and charged to expense for the year ended December 31, 2013 $ 3,961 $ 1,804 $ 5,765 Changes to the accrued restructuring liability (which is included in Accrued and other current liabilities) for 2015 , 2014 and 2013 , (in thousands): By Type of Cost Employee Separation Costs Contract Assignment Costs Total Accrued liability as of December 31, 2012 $ 731 $ 1,700 $ 2,431 Costs incurred and charged to expense for the year ended December 31, 2013, excluding non-cash charges 3,961 — 3,961 Cash payments (3,936 ) (1,700 ) (5,636 ) Accrued liability as of December 31, 2013 756 — 756 Costs incurred and charged to expense for the year ended December 31, 2014 4,992 — 4,992 Cash payments (5,299 ) — (5,299 ) Accrued liability as of December 31, 2014 449 — 449 Costs incurred and charged to expense for the period to date in 2015 5,279 — 5,279 Cash payments (4,324 ) — (4,324 ) Accrued liability as of December 31, 2015 $ 1,404 $ — $ 1,404 |
Lease Exit and Related Charges
Lease Exit and Related Charges | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure Changes To Accrued Loss On Excess Office Facilities [Abstract] | |
Loss on Exit and Related Charges | Note 11. Lease Exit and Related Charges As a result of the reduction in use of RealNetworks' office space, primarily in our corporate headquarters in Seattle, Washington, and certain other locations, losses have been recognized representing rent and contractual operating expenses over the remaining life of the leases, and related write-downs of leasehold improvements to their estimated fair value. In the quarter ended September 30, 2015, we recorded $2.1 million of losses relating to an approximate 43% reduction of office space at our leased corporate headquarters in Seattle, Washington. In 2013, we entered into this lease and early terminated the lease on our previous corporate headquarters, as described in more detail in our 2014 10-K. We continue to regularly evaluate the market for office space. If the market for such space changes further in future periods, we may have to revise our estimates which may result in future adjustments to expense for excess office facilities. Changes to the accrued loss on excess office facilities (in thousands): Years Ended December 31, 2015 2014 2013 Accrued loss, beginning of year $ 234 $ 254 $ 4,213 Additions and adjustments to the lease loss accrual, including sublease income estimate revision, and related asset write-downs 2,981 668 1,421 Less amounts paid, net of sublease income (620 ) (688 ) (5,380 ) Accrued loss, end of year 2,595 234 254 Less current portion (included in Accrued and other current liabilities) (822 ) (234 ) (254 ) Accrued loss, non-current portion (included in Other long term liabilities) $ 1,773 $ — $ — |
Shareholders_ Equity
Shareholders’ Equity | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Shareholders’ Equity | Note 12. Shareholders’ Equity Accumulated Other Comprehensive Income (Loss) Changes in components of accumulated other comprehensive income (in thousands): Years Ended December 31, 2015 2014 2013 Investments Accumulated other comprehensive income (loss), beginning of period $ 2,252 $ 6,397 $ 26,685 Unrealized gains (losses), net of tax effects of $0, $0, and $(54) (562 ) (1,774 ) 2,121 Reclassification adjustments for losses (gains) included in other income (expense), net of tax effects of $0, $4, and $(800) (393 ) (2,371 ) (22,409 ) Net current period other comprehensive income (955 ) (4,145 ) (20,288 ) Accumulated other comprehensive income (loss) balance, end of period $ 1,297 $ 2,252 $ 6,397 Foreign currency translation Accumulated other comprehensive income (loss), beginning of period $ (57,504 ) $ (54,092 ) $ (53,225 ) Translation adjustments (3,009 ) (3,364 ) (296 ) Reclassification adjustments for losses (gains) included in other income (expense) (264 ) (48 ) (571 ) Net current period other comprehensive income (3,273 ) (3,412 ) (867 ) Accumulated other comprehensive loss balance, end of period $ (60,777 ) $ (57,504 ) $ (54,092 ) Total accumulated other comprehensive income (loss), end of period $ (59,480 ) $ (55,252 ) $ (47,695 ) Preferred Stock. Each share of Series A preferred stock entitles the holder to one thousand votes and dividends equal to one thousand times the aggregate per share amount of dividends declared on the common stock. There are no shares of Series A preferred stock outstanding. Undesignated preferred stock will have rights and preferences that are determinable by the Board of Directors if and when determination of a new series of preferred stock has been established. |
Employee Stock and Benefit Plan
Employee Stock and Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Stock and Benefit Plans | Note 13. Employee Stock and Benefit Plans Equity Compensation Plans. Under our equity incentive plans we may grant various types of equity awards to employees and Directors. We have granted time-vest and performance-vest stock options and time-vest and performance-vest restricted stock. Generally, options vest based on continuous employment, over a four -year period. The options generally expire seven years from the date of grant and are exercisable at the market value of the common stock at the grant date. Time-vest restricted stock awards generally vest based on continuous employment over a two or four -year period. Performance-based awards vest if the specified performance targets are met and the grantee remains employed over the required period. The performance targets for these awards are generally based on the achievement of company-specific financial results. For these performance-based awards, expense is recognized when it is probable the performance goal will be achieved. We have also issued market-based performance stock options to certain employees. These awards vest if the market condition is met and the grantee remains employed over the requisite service period. We issue new shares of common stock upon exercise of stock options and the vesting of restricted stock. As of December 31, 2015 there were 8.2 million shares of common stock authorized for future equity awards. Each restricted stock unit granted reduces and each restricted stock unit forfeited or canceled increases the shares available for future grant by a factor of 1.6 shares. Each stock option granted reduces and each stock option forfeited or canceled increases the shares available for future grant by a factor of one share. We also have an employee stock purchase plan, under which 0.4 million shares of common stock are authorized for future issuance as of December 31, 2015 . Stock-based compensation expense recognized in our consolidated statements of operations includes amounts related to stock options, restricted stock, and employee stock purchase plans and was as follows (in thousands): Years Ended December 31, 2015 2014 2013 Total stock-based compensation expense $ 4,698 $ 5,204 $ 7,468 The total stock-based compensation amounts disclosed above are recorded in their respective line items within operating expenses in the consolidated statement of operations. No stock-based compensation was capitalized as part of the cost of an asset as of December 31, 2015 , 2014 , or 2013 . As of December 31, 2015 , we had $9.0 million of total unrecognized compensation cost, net of estimated forfeitures, related to stock awards. The unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately two years. As discussed in Note 1. Description of Business and Summary of Significant Accounting Policies , the valuation models for stock option awards require various highly judgmental assumptions. The assumption for the expected term of the options represents the estimated period of time until exercise and is based on historical experience of similar awards, including the contractual terms, vesting schedules, and expectations of future employee behavior. Expected stock price volatility is based on historical volatility of our common stock for the related expected term. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues with a term equivalent to the expected term of the stock options. The dividend yield is estimated at zero because we do not currently anticipate paying dividends in the foreseeable future. The fair value of options granted used the following weighted average assumptions: Years ended December 31, 2015 2014 2013 Expected dividend yield — % — % — % Risk-free interest rate 1.47 % 1.40 % 0.86 % Expected term (years) 4.8 4.5 4.3 Volatility 38 % 41 % 48 % Restricted stock unit and award activity was as follows (shares are in thousands): Shares Weighted Average Grant Date Fair Value Per Share Total Grant Date Fair Value of Vested Awards (000's) Nonvested shares, December 31, 2012 1,249 $ 8.52 Granted 232 7.18 Vested (581 ) 9.13 $ 4,438 Forfeited/Canceled (410 ) 7.74 Nonvested shares, December 31, 2013 490 $ 7.80 Granted 159 7.60 Vested (193 ) 8.35 $ 1,608 Forfeited/Canceled (56 ) 7.73 Nonvested shares, December 31, 2014 400 $ 7.47 Granted 296 5.44 Vested (109 ) 7.01 $ 763 Forfeited/Canceled (263 ) 7.27 Nonvested shares, December 31, 2015 324 $ 5.94 At December 31, 2015 the aggregate intrinsic value of restricted stock awards was $1.4 million and the weighted average remaining contractual term was approximately 1 year . Stock option activity (shares are in thousands): Options Outstanding Weighted Average Grant Date Fair Value Number of Shares Weighted Average Exercise Price Outstanding, December 31, 2012 4,534 $ 14.07 Options granted at common stock price 3,578 7.56 $ 2.93 Options exercised (24 ) 5.56 Options cancelled (1,463 ) 15.76 Outstanding, December 31, 2013 6,625 $ 10.21 Options granted at common stock price 2,036 7.44 $ 2.51 Options exercised (44 ) 7.26 Options cancelled (1,893 ) 14.47 Outstanding, December 31, 2014 6,724 $ 8.19 Options granted at common stock price 907 5.31 $ 1.70 Options exercised (14 ) 1.92 Options cancelled (2,100 ) 8.59 Outstanding, December 31, 2015 5,517 $ 7.58 Exercisable, December 31, 2015 2,894 $ 8.26 Vested and expected to vest, December 31, 2015 5,416 $ 7.61 In 2015 and 2014 we granted 200,000 and 400,000 market-based stock options, which are included in the stock option tables above. As of December 31, 2015 , the weighted average remaining contractual life of the options was as follows: outstanding options 4.8 years; exercisable options 4.0 years; and vested and expected to vest options 4.7 years. As of December 31, 2015 , the aggregate intrinsic value of the options was as follows: outstanding options $0.1 million ; exercisable options had a value considered insignificant ; and vested and expected to vest options $0.1 million . The aggregate intrinsic value of stock options exercised in 2015 and 2014 was insignificant . The aggregate intrinsic value of stock options exercised in 2013 was $0.1 million . Employee Stock Purchase Plan. Our Employee Stock Purchase Plan (ESPP) allows an eligible employee to purchase shares of our common stock at a price equal to 85 percent of the fair market value of the common stock at the end of the semi-annual offering periods, subject to certain limitations. Under the ESPP, 94,400 78,500 and 71,600 shares were purchased during the years ended December 31, 2015 , 2014 and 2013 , respectively. Retirement Savings Plan. We have a salary deferral plan (401(k) Plan) that covers substantially all employees. Eligible employees may contribute a portion of their eligible compensation to the plan up to limits stated in the plan documents, not to exceed the dollar amounts set by applicable laws. During the years ended December 31, 2015 , 2014 , and 2013 , we matched 50% of the first three percent of participating employees’ contributions, and contributed $0.6 million , $0.7 million , and $0.8 million , respectively, in matching contributions. We can terminate the matching contributions at our discretion. We have no other post-employment or post-retirement benefit plans. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 14. Income Taxes Components of income (loss) before income taxes (in thousands): Years ended December 31, 2015 2014 2013 United States operations $ (76,450 ) $ (67,186 ) $ (50,032 ) Foreign operations (6,231 ) (3,349 ) (4,055 ) Income (loss) before income taxes $ (82,681 ) $ (70,535 ) $ (54,087 ) Components of income tax expense (benefit) (in thousands): Years ended December 31, 2015 2014 2013 Current: United States federal $ 176 $ 547 $ 2,460 State and local (44 ) 69 61 Foreign 592 901 1,706 Total current 724 1,517 4,227 Deferred: United States federal (1,636 ) 21 (1,890 ) State and local 1 (40 ) 51 Foreign 77 (218 ) 2,515 Total deferred (1,558 ) (237 ) 676 Total income tax expense (benefit) $ (834 ) $ 1,280 $ 4,903 Income tax expense differs from “expected” income tax expense (computed by applying the U.S. federal income tax rate of 35% ) due to the following (in thousands): Years ended December 31, 2015 2014 2013 United States federal tax expense (benefit) at statutory rate $ (28,938 ) $ (24,687 ) $ (18,930 ) State taxes, net of United States federal tax expense (benefit) (1,240 ) (1,083 ) (841 ) Change in valuation allowance 27,821 27,759 25,046 Non-deductible stock compensation 218 270 415 Impact of non-U.S. jurisdictional tax rate difference 648 529 487 Research and development tax credit (243 ) (325 ) (1,632 ) Increase (reversal) of unrecognized tax benefits (1,269 ) (901 ) 671 Non-U.S. withholding tax 141 393 1,805 Other 2,028 (675 ) (2,118 ) Total income tax expense (benefit) $ (834 ) $ 1,280 $ 4,903 Net deferred tax assets are comprised of the following (in thousands): December 31, 2015 2014 Deferred tax assets: United States federal net operating loss carryforwards $ 84,426 $ 66,547 Deferred expenses 1,591 2,552 Research and development tax credit carryforwards 24,442 22,979 Alternative minimum tax credit carryforward 3,626 3,626 Net unrealized loss on investments 97 97 Accrued loss on excess office facilities 959 — Stock-based compensation 11,441 11,398 State net operating loss carryforwards 10,079 8,400 Foreign net operating loss carryforwards 30,657 34,210 Deferred revenue 82 401 Equipment, software, and leasehold improvements 4,263 3,252 Intangibles 12 19 Other 5,150 4,332 Gross deferred tax assets 176,825 157,813 Less valuation allowance 173,872 149,474 Gross deferred tax assets, net of valuation allowance $ 2,953 $ 8,339 Deferred tax liabilities: Other intangible assets $ (404 ) $ (3,035 ) Net unrealized gains and basis differences on investments (78 ) (4,226 ) Other (218 ) (397 ) Prepaid expenses (1,384 ) (1,360 ) Gross deferred tax liabilities (2,084 ) (9,018 ) Net deferred tax assets (liabilities) $ 869 $ (679 ) Income tax receivables were $0.1 million and $0.1 million at December 31, 2015 and 2014 , respectively. In 2015 , we continued to record a valuation allowance on the deferred tax assets that we believe are not more likely than not to be realized. The net change in valuation allowance was a $24.4 million increase and a $20.6 million increase during the years ended December 31, 2015 and 2014 , respectively. We maintain a valuation allowance of $173.9 million for our deferred tax assets due to uncertainty regarding their realization as of December 31, 2015 . The net increase in the valuation allowance since December 31, 2014 of $24.4 million was the result of an increase in current year deferred tax assets for which the Company maintains a valuation allowance. RealNetworks' U.S. federal net operating loss carryforwards totaled $241.2 million and $190.1 million at December 31, 2015 and 2014 , respectively. The increase is mainly due to the current year U.S. taxable loss. The remaining net operating loss carryforwards as of December 31, 2015 are from prior U.S. taxable losses and from acquired subsidiaries that are limited under Internal Revenue Code Section 382. These net operating loss carryforwards expire between 2024 and 2035. RealNetworks' alternative minimum tax credit carryforward remained at $3.6 million from December 31, 2014 to December 31, 2015 . The alternative minimum tax credit can be carried forward indefinitely. RealNetworks' U.S. federal research and development tax credit carryforward totaled $24.4 million and $23.0 million at December 31, 2015 and 2014 , respectively. The research and development credit carryforwards expire between 2020 and 2035. As of December 31, 2015 and 2014 , we had $0.3 million and $3.5 million of unrecognized tax benefits, respectively. The decrease in unrecognized tax benefits is the result of the defense of our positions, and ultimate settlement and closure of a United States federal tax examination. As of December 31, 2015, there are no unrecognized tax benefits remaining that would affect our effective tax rate if recognized, as the offset would increase the valuation allowance. We do not anticipate that the total amount of unrecognized tax benefits will significantly change within the next twelve months. We recognize interest and penalties related to unrecognized tax benefits within the provision for income taxes. As of December 31, 2015 , and 2014 we have no accrued interest or penalties related to uncertain tax positions. Reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits (in thousands): Years ended December 31, 2015 2014 2013 Balance, beginning of year $ 3,541 $ 4,505 $ 3,978 Decreases related to prior year tax positions (33 ) (196 ) (125 ) Settlements with taxing authorities (3,285 ) — — Increases related to current year tax positions 97 130 652 Expiration of the statute of limitations — (898 ) — Balance, end of year $ 320 $ 3,541 $ 4,505 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 15. Earnings (Loss) Per Share Basic and diluted net income (loss) per share (EPS) (in thousands, except per share data): Years ended December 31, 2015 2014 2013 Net income (loss) $ (81,847 ) $ (71,815 ) $ (58,990 ) Weighted average common shares outstanding used to compute basic EPS 36,165 35,947 35,553 Dilutive effect of stock based awards — — — Weighted average common shares outstanding used to compute diluted EPS 36,165 35,947 35,553 Basic EPS $ (2.26 ) $ (2.00 ) $ (1.66 ) Diluted EPS $ (2.26 ) $ (2.00 ) $ (1.66 ) Approximately 5.7 million , 6.3 million , and 4.6 million shares of potentially issuable shares from stock awards were excluded from the calculation of diluted EPS for the years ended December 31, 2015 , 2014 , and 2013 , respectively, because of their antidilutive effect. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 16. Commitments and Contingencies Commitments. We have commitments for future payments related to office facilities leases. We lease office facilities under various operating leases expiring through 2024. Future minimum payments as of December 31, 2015 are as follows (in thousands): Office Leases 2016 $ 6,550 2017 5,046 2018 3,648 2019 3,685 2020 3,618 Thereafter 13,712 Total minimum payments $ 36,259 Of the total office lease future minimum payments, $2.6 million is recorded in accrued lease exit and related charges at December 31, 2015 . Rent expense during the years ended December 31, 2015 , 2014 , and 2013 , was $5.8 million , $6.8 million , and $8.3 million , respectively. These amounts are net of sublease income of $0.2 million , $0.2 million and $0.8 million in each of the years ended December 31, 2015 , 2014 and 2013 . Litigation . In October 2013, we executed settlement agreements relating to certain outstanding litigation matters; specifically, the matters brought against us by VoiceAge Corporation and Callertone Innovations, Inc. which are more fully described in our 2013 Annual Report on Form 10-K. During the fourth quarter of 2013, we paid an aggregate of $11.5 million , representing our total obligation under these settlements. We could in the future become subject to legal proceedings, governmental investigations and claims in the ordinary course of business, including employment claims, contract-related claims, and claims of alleged infringement of third-party patents, trademarks and other intellectual property rights. Such claims, even if not meritorious, could force us to expend significant financial and managerial resources. In addition, given the broad distribution of some of our consumer products, any individual claim related to those products could give rise to liabilities that may be material to us. In the event of a determination adverse to us, we may incur substantial monetary liability, and/or be required to change our business practices. Either of these could have a material adverse effect on our consolidated financial statements. |
Guarantees
Guarantees | 12 Months Ended |
Dec. 31, 2015 | |
Guarantees [Abstract] | |
Guarantees | Note 17. Guarantees In the ordinary course of business, RealNetworks is subject to potential obligations for standard warranty and indemnification provisions that are contained within many of our customer license and service agreements. Our warranty provisions are consistent with those prevalent in our industry, and we do not have a history of incurring losses on warranties; therefore, we do not maintain accruals for warranty-related obligations. With regard to indemnification provisions, nearly all of our carrier contracts obligate us to indemnify our carrier customers for certain liabilities that may be incurred by them. We have received in the past, and may receive in the future, claims for indemnification from some of our carrier customers. In relation to certain patents and other technology assets we sold to Intel in the second quarter of 2012, we have specific obligations to indemnify Intel for breaches of the representations and warranties that we made and covenants that we agreed to in the asset purchase agreement for certain potential future intellectual property infringement claims brought by third parties against Intel. The amount of any potential liabilities related to our indemnification obligations to Intel will not be determined until a claim has been made, but we are obligated to indemnify Intel up to the amount of the gross purchase price that we received in the sale. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | Note 18. Segment Information We have three reportable segments: (1) RealPlayer Group, which includes our new RealTimes product, our RealPlayer media player software, intellectual property licensing, and our SuperPass service; (2) Mobile Entertainment, which includes our SaaS services, our LISTEN product and to a lesser degree, sales of technology licenses of our software products such as Helix, in which we ceased investing during the fourth quarter of 2014; and (3) Games, which includes all our games-related businesses, including sales of games licenses, online games subscription services, advertising on games sites and social network sites, microtransactions from online and social games, and sales of mobile games. We allocate certain corporate expenses which are directly attributable to supporting the business to our reportable segments. These corporate expenses include but are not limited to a portion of finance, legal, human resources and headquarters facilities. Remaining expenses, which are not directly attributable to supporting the business, are reported as corporate items. All restructuring, lease exit and related charges are reported as corporate items. Also reported as a corporate item was the 2014 extinguishment of the liability associated with our historical musical business, and the 2013 loss on litigation settlements. RealNetworks reports the three reportable segments based on factors such as how we manage our operations and how our Chief Operating Decision Maker reviews results. Our Chief Operating Decision Maker is considered to be the CEO Staff (CEOS), which includes the Chief Executive Officer, Chief Financial Officer, our Presidents and General Counsel. The CEOS reviews financial information presented on both a consolidated basis and on a business segment basis. The accounting policies used to derive segment results are the same as those described in Note 1. Description of Business and Summary of Significant Accounting Policies . Segment results for the years ended December 31, 2015 , 2014 and 2013 were as follows (in thousands): RealPlayer Group 2015 2014 2013 Revenue $ 29,141 $ 39,201 $ 75,206 Cost of revenue 16,171 14,508 16,220 Gross profit 12,970 24,693 58,986 Operating expenses 47,149 55,742 60,484 Operating income (loss) $ (34,179 ) $ (31,049 ) $ (1,498 ) Mobile Entertainment 2015 2014 2013 Revenue $ 65,407 $ 79,901 $ 81,181 Cost of revenue 44,212 50,399 47,608 Gross profit 21,195 29,502 33,573 Operating expenses 20,256 33,325 35,839 Operating income (loss) $ 939 $ (3,823 ) $ (2,266 ) Games 2015 2014 2013 Revenue $ 30,748 $ 37,110 $ 49,809 Cost of revenue 9,291 11,074 13,359 Gross profit 21,457 26,036 36,450 Operating expenses 29,086 37,170 47,177 Operating income (loss) $ (7,629 ) $ (11,134 ) $ (10,727 ) Corporate 2015 2014 2013 Cost of revenue $ 623 $ 400 $ 1,904 Extinguishment of liability — (10,580 ) — Operating expenses 27,695 33,327 54,413 Operating income (loss) $ (28,318 ) $ (23,147 ) $ (56,317 ) Our customers consist primarily of consumers and corporations located in the U.S., Europe, Republic of Korea and various foreign countries (Rest of the World). Revenue by geographic region (in thousands): Years ended December 31, 2015 2014 2013 United States $ 46,893 $ 61,660 $ 90,250 Europe 15,166 26,575 38,155 Republic of Korea 37,832 39,852 46,601 Rest of the World 25,405 28,125 31,190 Total $ 125,296 $ 156,212 $ 206,196 Long-lived assets (consists of equipment, software, leasehold improvements, other intangible assets, and goodwill) by geographic region (in thousands): December 31, 2015 2014 2013 United States $ 16,821 $ 33,421 $ 40,347 Europe 4,898 6,696 8,280 Republic of Korea 282 547 936 Rest of the World 2,015 3,048 4,078 Total long-lived assets $ 24,016 $ 43,712 $ 53,641 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 19. Related Party Transactions Transactions with Rhapsody . See Note 4. Rhapsody Joint Venture for details on the 2010 restructuring transaction involving Rhapsody. Subsequent to the restructuring transaction, we were obligated to provide Rhapsody with certain support services. These support services, which included information technology and limited operational support provided directly to Rhapsody, were completed in 2013. RealNetworks has no further obligations or liabilities pursuant to the support services agreement. During the year ended December 31, 2013 we charged Rhapsody $0.5 million for the support services. In 2015, Rhapsody issued warrants to RealNetworks to purchase Rhapsody common shares. See Note 5. Fair Value Measurements for details on these warrants. |
Quarterly Information (Unaudite
Quarterly Information (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Information (Unaudited) | Note 20. Quarterly Information (Unaudited) The following table summarizes the unaudited statement of operations for each quarter of 2015 and 2014 (in thousands, except per share data): Total Dec. 31 Sept. 30 June 30 Mar. 31 (2) 2015 Net revenue $ 125,296 $ 29,922 $ 30,823 $ 33,954 $ 30,597 Gross profit 54,999 14,094 12,733 14,122 14,050 Operating (loss) income (69,187 ) (7,506 ) (21,962 ) (20,707 ) (19,012 ) Net income (loss) (81,847 ) (8,413 ) (21,184 ) (27,781 ) (24,469 ) Basic net income (loss) per share (1) (2.26 ) (0.23 ) (0.59 ) (0.77 ) (0.68 ) Diluted net income (loss) per share (1) (2.26 ) (0.23 ) (0.59 ) (0.77 ) (0.68 ) 2014 Net revenue $ 156,212 $ 35,506 $ 34,157 $ 40,825 $ 45,724 Gross profit 90,411 17,625 15,229 20,039 37,518 Operating (loss) income (69,153 ) (20,682 ) (20,763 ) (18,832 ) (8,876 ) Net income (loss) (71,815 ) (20,838 ) (22,178 ) (21,029 ) (7,770 ) Basic net income (loss) per share (1) (2.00 ) (0.58 ) (0.62 ) (0.59 ) (0.22 ) Diluted net income (loss) per share (1) (2.00 ) (0.58 ) (0.62 ) (0.59 ) (0.22 ) (1) The sum of the quarterly net income per share amounts will not necessarily equal net income per share for the year due to the use of weighted average quarterly shares and the effects of rounding. (2) In the quarter ended March 31, 2014, certain accrued royalty liabilities of $10.6 million associated with our historical music business, which had originally been recorded based on statutory rates, were extinguished. |
Description of Business and S28
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business. RealNetworks, Inc. and subsidiaries is a leading global provider of network-delivered digital media applications and services that make it easy to manage, play and share digital media. The Company also develops and markets software products and services that enable the creation, distribution and consumption of digital media, including audio and video. Inherent in our business are various risks and uncertainties, including a limited history of certain of our product and service offerings. RealNetworks' success will depend on the acceptance of our technology, products and services and the ability to generate related revenue. In this Annual Report on Form 10-K for the year ended December 31, 2015 (10-K), RealNetworks, Inc. and subsidiaries is referred to as “RealNetworks”, the “Company”, “we”, “us”, or “our”. |
Basis of Presentation | Basis of Presentation. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations for the periods presented. Operating results for the year ended December 31, 2015 are not necessarily indicative of the results that may be expected for any subsequent periods. |
Use of Estimates | Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and, Cash Equivalents, and Short-Term Investments, and Available-for-Sale Securities | Cash and Cash Equivalents, Short-Term Investments, and Available-for-Sale Securities. We consider all short-term investments with a remaining contractual maturity at date of purchase of three months or less to be cash equivalents. We have classified as available-for-sale all marketable debt and equity securities for which there is determinable fair market value and there are no restrictions on our ability to sell. Available-for-sale securities are carried at fair value with unrealized gains and losses reported in accumulated other comprehensive income (loss) (AOCI) in shareholders' equity, net of any applicable income taxes. Investments with remaining contractual maturities of five years or less are classified as short-term because the investments are marketable and highly liquid, and we have the ability to utilize them for current operations. Realized gains and losses and declines in value judged to be other-than-temporary on available-for-sale securities are included in other income (expense), net. Realized and unrealized gains and losses on available-for-sale securities are determined using the specific identification method. |
Trade Accounts Receivable | Trade Accounts Receivable. Trade accounts receivable consist of amounts due from customers and do not bear interest. The allowance for doubtful accounts and sales returns is our estimate of the amount of probable credit losses and returns in our existing accounts receivable. We determine the allowances based on analysis of historical bad debts, customer concentrations, customer credit-worthiness, return history and current economic trends. We review the allowances for doubtful accounts and sales returns quarterly. Past due balances over 90 days and specified other balances are reviewed individually for collectability. All other balances are reviewed on an aggregate basis. Account balances are written off against the allowance after all reasonable means of collection have been exhausted and the potential for recovery is considered remote. We do not have any off-balance sheet credit exposure related to our customers. |
Concentration of Credit Risk | Concentration of Credit Risk. Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, and accounts receivable. Short-term investments consist of U.S. government and government agency securities, corporate notes and bonds, and municipal securities. We derive a portion of our revenue from a large number of individual consumers spread globally. We also derive revenue from several large customers. If the financial condition or results of operations of any one of the large customers deteriorates substantially, our operating results could be adversely affected. To reduce credit risk, management performs ongoing credit evaluations of the financial condition of significant customers. We do not generally require collateral and we maintain an allowance for estimated credit losses on customer accounts when considered necessary. |
Depreciation and Amortization | Depreciation and Amortization. Depreciation of equipment and software, as well as amortization of leasehold improvements is computed using the straight-line method over the lesser of the estimated useful lives of the assets or the related lease term. The useful life of equipment and software is generally three to five years. Depreciation and amortization expense of these assets during the years ended December 31, 2015 , 2014 , and 2013 was $8.1 million , $8.5 million , and $14.3 million , respectively. |
Valuation of Equity Method Investments | Equity Method Investment. We use the equity method in circumstances where we have the ability to exert significant influence, but not control, over an investee or joint venture. We initially record our investment based on a fair value analysis of the investment. We record our percentage interest in the investee's recorded income or loss and changes in the investee's capital under this method, which will increase or decrease the reported value of our investment. See Note 4, Rhapsody Joint Venture, to the audited consolidated financial statements included in Item 8 of this 10-K, for additional information. We evaluate impairment of an investment accounted for under the equity method if events and circumstances warrant. An impairment charge would be recorded if a decline in the fair value of an equity investment below its carrying amount were determined to be other than temporary. In determining if a decline is other than temporary, we consider factors such as the length of time and extent to which the fair value of the investment has been less than the carrying amount of the investee or joint venture, the near-term and longer-term operating and financial prospects of the investee or joint venture and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery. |
Deferred Costs | Deferred Costs. We defer certain costs on projects for service revenues and system sales. Deferred costs consist primarily of direct and incremental costs to customize and install systems, as defined in individual customer contracts, including costs to acquire hardware and software from third parties and payroll and related costs for employees and other third parties. Deferred costs are capitalized during the implementation period. We recognize such costs as a component of cost of revenue, the timing of which is dependent upon the revenue recognition policy by contract. At each balance sheet date, we review deferred costs to ensure they are ultimately recoverable. Any anticipated losses on uncompleted contracts are recognized when evidence indicates the estimated total cost of a contract exceeds its estimated total revenue or if actual deferred costs exceed estimated contractual revenue. Assessing the recoverability of deferred costs is based on significant assumptions and estimates, including future revenue and cost of sales. Significant or sustained decreases in revenue or increases in cost of sales in future periods could result in impairments of deferred project costs and prepaid royalty advances. We cannot accurately predict the amount and timing of any such impairments. Should deferred project costs or prepaid royalty advances become impaired, we would record the appropriate charge, which could have a material adverse effect on our financial condition and results of operations. As of December 31, 2014, we determined that the total estimated costs associated with a project exceeded the total estimated revenues expected to be recognized on that project. As a result, we impaired $0.7 million in deferred project costs. This charge was included in cost of revenue in the accompanying consolidated statements of operations and comprehensive income (loss). No such charges were incurred in 2015 or 2013. |
Other Definite-Lived Intangible Assets | Definite-Lived Tangible and Intangible Assets. Definite-lived tangible assets include equipment, software and leasehold improvements and are carried at cost less accumulated depreciation and amortization. Definite-lived intangible assets consist primarily of the fair value of customer agreements and contracts, and developed technology acquired in business combinations and are amortized over their estimated useful lives. We review these assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. If the carrying amount of an asset group is not recoverable, an impairment loss is recognized if the carrying amount of the asset group exceeds its estimated fair value, which is generally determined as the present value of estimated future cash flows to a market participant. Our impairment analysis is based on significant assumptions of future results, including operating and cash flow projections. Significant or sustained declines in future revenue or cash flows, or adverse changes in our business climate, among other factors, could result in the need to record an impairment charge in future periods. |
Goodwill | Goodwill. We test goodwill for impairment on an annual basis, in our fourth quarter, or more frequently if circumstances indicate reporting unit carrying values may exceed their fair values. Circumstances that may indicate a reporting unit's carrying value exceeds its fair value include, but are not limited to: poor economic performance relative to historical or projected future operating results; significant negative industry, economic or company specific trends; changes in the manner of our use of the assets or the plans for our business; and loss of key personnel. When evaluating goodwill for impairment, based upon our annual test or due to changes in circumstances described above, we first perform a qualitative assessment to determine if the fair value of a reporting unit is more likely than not less than the reporting unit's carrying amount including goodwill. If this assessment indicates it is more likely than not, we then compare the carrying value of the reporting unit to the estimated fair value of the reporting unit. If the carrying value of the reporting unit exceeds the estimated fair value, we then calculate the implied estimated fair value of goodwill for the reporting unit and compare it to the carrying amount of goodwill for the reporting unit. If the carrying amount of goodwill exceeds the implied estimated fair value, an impairment charge to current operations is recorded to reduce the carrying value to implied estimated value. Significant judgment is required in determining the reporting units and assessing fair value of the reporting units. |
Indefinite-Lived Intangible Assets | Indefinite-Lived Intangible Assets. We evaluate indefinite-lived intangible assets (primarily tradenames and trademarks) for impairment on an annual basis, in the fourth quarter, or more frequently if an event occurs or changes in circumstances indicate that impairment may exist. When evaluating indefinite-lived intangible assets for impairment, we may first perform a qualitative assessment to determine if the fair value of the intangible assets is more likely than not greater than its carrying amount. If we do not perform a qualitative assessment or if the fair value of the intangible assets is not more likely than not greater than its carrying amount, we estimate the fair value of the intangible assets. If the carrying amount of the intangible assets exceeds the estimated fair value, an impairment charge is recorded to reduce the carrying value to the estimated fair value. Significant judgment is required in assessing fair value of the indefinite-lived intangible assets. With the sale of our Slingo and social casino game business in 2015 as described in more detail in Note 3. Acquisitions and Disposals , we had no indefinite-lived intangible assets at December 31, 2015. |
Fair Value of Financial Instruments | Fair Value. Fair value is the price that would be received from selling an asset or paid in transfering a liability in an orderly transaction between market participants at the measurement date. Our fair value measurements consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. Fair values are determined based on three levels of inputs: • Level 1: Quoted prices in active markets for identical assets or liabilities • Level 2: Directly or indirectly observed inputs for the asset or liability, including quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active • Level 3: Significant unobservable inputs that reflect our own estimates of assumptions that market participants would use |
Research and Development | Research and Development. Costs incurred in research and development are expensed as incurred. Software development costs are capitalized when a product’s technological feasibility has been established through the date the product is available for general release to customers. Other than internal use software, we have not capitalized any software development costs, as technological feasibility is generally not established until a working model is completed, at which time substantially all development is complete. |
Revenue Recognition | Revenue Recognition. We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable. Physical products are considered delivered to the customer once they have been shipped and title and risk of loss have been transferred. For online sales, the products or services are considered delivered at the time the products or services are made available, digitally, to the end user. We recognize revenue on a gross or net basis. In most arrangements, we contract directly with end user customers, and are the primary obligor. In such arrangements, we recognize revenue on a gross basis. In some cases, we utilize third-party distributors who are the primary obligor to sell products or services directly to end user customers. In such instances, we recognize revenue on a net basis. In our direct to consumer operations, we derive revenue through (1) subscriptions of our SuperPass and Real Player Cloud products within our RealPlayer Group segment and subscriptions sold by our Games segment, (2) sales of content downloads, software and licenses offered by our RealPlayer Group, Mobile Entertainment, and Games segments and (3) the sale of advertising and the distribution of third-party products on our websites and in our games. Consumer subscription products are paid in advance, typically for monthly, quarterly or annual duration. Subscription revenue is recognized ratably over the related subscription time period. Revenue from sales of content downloads, software and licenses is recognized at the time the product is made available, digitally, to the end user. Revenue generated from advertising on our websites and from advertising and the distribution of third-party products included in our products is recognized as revenue at the time of delivery. We also generate revenue through business-to-business channels by providing services within our Mobile Entertainment segment enabling mobile carriers to deliver audio and video content to their customers and by selling software licenses and products and related support and other services. Revenue generated from services provided to mobile carriers that enable the delivery of audio and video content to their customers is recognized as the services are provided. Setup fees to build these services are recognized ratably upon launch of the service over the remaining expected term of the service. Non-software revenue arrangements containing multiple elements are divided into separate units of accounting, after being evaluated for specific criteria. If the criteria for separation are met, revenue is allocated to the individual units using the relative fair value method. If the criteria are not met, the elements are treated as one unit of accounting and revenue recognition is delayed until all elements have been delivered. In the case of revenue arrangements containing software, elements are divided into separate units of accounting only when vendor-specific objective evidence has been established. In cases where vendor-specific objective evidence has not been established, undelivered elements are combined into one unit of accounting and are not recognized in revenue until all elements have been delivered. |
Advertising Expenses | Advertising Expenses. We expense the cost of advertising and promoting our products as incurred. |
Foreign Currency | Foreign Currency. The functional currency of the Company’s foreign subsidiaries is the currency of the country in which the subsidiary operates. Assets and liabilities of foreign operations are translated into U.S. dollars using rates of exchange in effect at the end of the reporting period. The net gain or loss resulting from translation is shown as translation adjustment and included in AOCI in shareholders’ equity. Income and expense accounts are translated into U.S. dollars using average rates of exchange. Gains and losses from foreign currency transactions are included in the consolidated statements of operations. |
Derivative Financial Instruments | Derivative Financial Instruments. We conduct business internationally in several currencies and thus we are exposed to adverse movements in foreign currency exchange rates. A portion of these risks may be managed through the use of financial derivatives, but fluctuations in foreign exchange rates could impact our results of operations and financial position. Where appropriate, we manage foreign currency risk for certain material short-term intercompany balances through the use of foreign currency forward contracts. These contracts require us to exchange currencies at rates agreed upon at the contract’s inception. Because the impact of movements in currency exchange rates on forward contracts offsets the related impact on the short-term intercompany balances, these financial instruments help alleviate the risk that might otherwise result from certain changes in currency exchange rates. We do not designate foreign exchange forward contracts related to short-term intercompany accounts as hedges and, accordingly, we adjust these instruments to fair value through our results of operations. However, we may periodically hedge a portion of our foreign exchange exposures associated with material firmly committed transactions and long-term investments. All derivatives, whether designated in hedging relationships or not, are recorded on the balance sheet at fair value. If the derivative is designated a hedge, then depending on the nature of the hedge, changes in fair value will either be recorded immediately in results of operations, or be recognized in AOCI until the hedged item is recognized in results of operations. |
Accounting for Taxes Collected from Customers | Accounting for Taxes Collected from Customers. Our revenues are reported net of sales and other transaction taxes that are collected from customers and remitted to taxing authorities. |
Income Taxes | Income Taxes. We compute income taxes using the asset and liability method, under which deferred income taxes are provided for temporary differences between financial reporting basis and tax basis of our assets and liabilities and operating loss and tax credit carryforwards. We record a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets depends on the ability to generate sufficient taxable income of the appropriate character in the appropriate taxing jurisdictions. Adjustments to the valuation allowance could be required in the future if we estimate that the amount of deferred tax assets to be realized is more or less than the net amount we have recorded. Any increase or decrease in the valuation allowance could have the effect of increasing or decreasing the income tax provision in the statement of operations. Deferred tax assets and liabilities and operating loss and tax credit carryforwards are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and operating loss and tax credit carryforwards are expected to be recovered or settled. We file numerous consolidated and separate income tax returns in the U.S. including federal, state and local, as well as foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal income tax examinations for tax years before 2013 or state, local, or foreign income tax examinations for years before 1993. We are currently under audit by various states and foreign jurisdictions for certain tax years subsequent to 1993. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. We recognize accrued interest and penalties related to uncertain tax positions as a component of income tax expense. |
Stock-Based Compensation | Stock-Based Compensation. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is the vesting period. We use the Black-Scholes option-pricing model or other appropriate valuation models such as Monte Carlo simulation to determine the fair value of stock-based option awards. The fair value of restricted stock awards is based on the closing market price of our common stock on the award date. Generally, we recognize the compensation cost for awards on a straight-line basis for the entire award, over the applicable vesting period. For performance-based awards, expense is recognized when it is probable the performance goal will be achieved, however if the likelihood becomes improbable, that expense is reversed. For market-based stock options, fair value is measured at the grant date using the Monte Carlo simulation model and we recognize compensation cost for these awards on a straight-line basis over the requisite service period for each separately vesting portion of the awards. For our employee stock purchase plan, compensation expense is measured based on the discount the employee is entitled to upon purchase. The valuation models for stock-based option awards require various highly judgmental assumptions including volatility in our common stock price and expected option life. If any of the assumptions used in the valuation models change significantly, stock-based compensation expense for new awards may differ materially in the future from the amounts recorded in the consolidated statements of operations. For all awards, we also estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. |
Net Income Per Share | Net Income Per Share. Basic net income (loss) per share (EPS) is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) by the weighted average number of common and dilutive potential common shares outstanding during the period. |
Rhapsody Joint Venture (Tables)
Rhapsody Joint Venture (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summarized Financial Operating Information for Rhapsody | Summarized financial information for Rhapsody, which represents 100% of their financial information, is as follows (in thousands): Year ended December 31, Year ended December 31, Year ended December 31, Net revenue $ 201,987 $ 173,484 $ 140,596 Gross profit 32,761 32,145 34,141 Net loss (35,479 ) (21,336 ) (14,663 ) As of December 31, 2015 As of December 31, 2014 Current assets $ 53,274 $ 47,021 Non-current assets 20,520 20,616 Current liabilities 92,794 65,458 Non-current liabilities 20,295 16,487 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Financial Assets Measured at Fair Value on a Recurring Basis | The following tables present information about our financial assets that have been measured at fair value on a recurring basis as of December 31, 2015 and 2014 , and indicates the fair value hierarchy of the valuation inputs utilized to determine fair value (in thousands). Fair Value Measurements as of Amortized Cost as of December 31, 2015 December 31, 2015 Level 1 Level 2 Level 3 Total Cash and cash equivalents: Cash $ 23,152 $ — $ — $ 23,152 $ 23,152 Money market funds 5,061 — — 5,061 5,061 Corporate notes and bonds — 19,102 — 19,102 19,102 Total cash and cash equivalents 28,213 19,102 — 47,315 47,315 Short-term investments: Corporate notes and bonds — 51,814 — 51,814 51,862 Total short-term investments — 51,814 — 51,814 51,862 Restricted cash equivalents and investments — 2,890 — 2,890 2,890 Equity investments in publicly traded securities 1,721 — — 1,721 362 Warrant issued by Rhapsody (included in Other assets) — — 1,053 1,053 — Total $ 29,934 $ 73,806 $ 1,053 $ 104,793 $ 102,429 Fair Value Measurements as of Amortized Cost as of December 31, 2014 December 31, 2014 Level 1 Level 2 Level 3 Total Cash and cash equivalents: Cash $ 30,105 $ — $ — $ 30,105 $ 30,105 Money market funds 11,629 — — 11,629 11,630 Corporate notes and bonds — 61,519 — 61,519 61,520 Total cash and cash equivalents 41,734 61,519 — 103,253 103,255 Short-term investments: Corporate notes and bonds — 51,453 — 51,453 51,438 U.S. government agency securities 7,000 — — 7,000 7,000 Total short-term investments 7,000 51,453 — 58,453 58,438 Restricted cash equivalents and investments — 3,000 — 3,000 3,000 Equity investments in publicly traded securities 2,676 — — 2,676 428 Total $ 51,410 $ 115,972 $ — $ 167,382 $ 165,121 |
Contractual Maturities of Short-term Investments | Contractual maturities of short-term investments as of December 31, 2015 are as follows (in thousands): Estimated Fair Value Within one year $ 51,389 Between one year and five years 425 Total short-term investments $ 51,814 |
Allowance for Doubtful Accoun31
Allowance for Doubtful Accounts Receivable and Sales Returns (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Activity in Allowance for Doubtful Accounts Receivable and Sales Returns | Activity in the allowance for doubtful accounts receivable (in thousands): Years ended December 31, 2015 2014 2013 Balance, beginning of year $ 1,288 $ 966 $ 1,010 Addition (reduction) to allowance (355 ) 433 (2 ) Amounts written off (77 ) — (83 ) Effects of foreign currency translation (91 ) (111 ) 41 Balance, end of year $ 765 $ 1,288 $ 966 Activity in the allowance for sales returns (in thousands): Years ended December 31, 2015 2014 2013 Balance, beginning of year $ 354 $ 569 $ 653 Addition (reduction) to allowance (186 ) (209 ) (64 ) Amounts written off (9 ) (6 ) (21 ) Effects of foreign currency translation (1 ) — 1 Balance, end of year $ 158 $ 354 $ 569 Total, Allowance for Doubtful Accounts Receivable and Sales Returns $ 923 $ 1,642 $ 1,535 |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | Other intangible assets (in thousands): As of December 31, 2015 2014 Gross Amount Accumulated Amortization Net Gross Amount Accumulated Amortization Net Amortizing intangible assets: Customer relationships $ 30,182 $ 29,236 $ 946 $ 33,853 $ 31,643 $ 2,210 Developed technology 24,047 23,244 803 28,261 25,699 2,562 Patents, trademarks and tradenames 3,717 3,398 319 3,817 3,528 289 Service contracts 5,269 5,201 68 6,312 5,764 548 63,215 61,079 2,136 72,243 66,634 5,609 Non-amortizing intangible assets: Trademarks and tradenames — — — 4,500 — 4,500 Total $ 63,215 $ 61,079 $ 2,136 $ 76,743 $ 66,634 $ 10,109 |
Schedule of Expected Amortization Expense | Estimated future amortization of other intangible assets (in thousands): 2016 $ 1,096 2017 686 2018 354 Total $ 2,136 No impairments of other intangible assets were recognized in 2015 , 2014 or 2013 . |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in goodwill (in thousands): December 31, 2015 2014 Balance, beginning of year Goodwill $ 328,008 $ 328,129 Accumulated impairment losses (310,653 ) (310,653 ) 17,355 17,476 Increases (decreases) due to current year acquisitions (disposals) (3,620 ) 460 Effects of foreign currency translation (655 ) (581 ) (4,275 ) (121 ) Balance, end of year Goodwill 323,733 328,008 Accumulated impairment losses (310,653 ) (310,653 ) $ 13,080 $ 17,355 Goodwill by segment (in thousands): December 31, 2015 2014 RealPlayer Group $ 945 $ 985 Mobile Entertainment 1,837 1,976 Games 10,298 14,394 Total goodwill $ 13,080 $ 17,355 |
Accrued and Other Current Lia34
Accrued and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Accrued and Other Liabilities | Accrued and other current liabilities (in thousands): December 31, 2015 December 31, 2014 Royalties and other fulfillment costs $ 3,094 $ 4,868 Employee compensation, commissions and benefits 5,958 7,711 Sales, VAT and other taxes payable 2,976 5,896 Other 5,292 6,811 Total accrued and other current liabilities $ 17,320 $ 25,286 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Charges by Type of Cost | Details of restructuring charges for the years ended December 31, 2015 , 2014 , and 2013 (excluding non-cash charges) are shown in the table below (in thousands): By Type of Cost Employee Separation Costs Asset Related and Other Costs Total Costs incurred and charged to expense for the year ended December 31, 2015 $ 5,279 $ — $ 5,279 Costs incurred and charged to expense for the year ended December 31, 2014 $ 4,992 $ — $ 4,992 Costs incurred and charged to expense for the year ended December 31, 2013 $ 3,961 $ 1,804 $ 5,765 |
Schedule of Restructuring Reserve by Type of Cost | Changes to the accrued restructuring liability (which is included in Accrued and other current liabilities) for 2015 , 2014 and 2013 , (in thousands): By Type of Cost Employee Separation Costs Contract Assignment Costs Total Accrued liability as of December 31, 2012 $ 731 $ 1,700 $ 2,431 Costs incurred and charged to expense for the year ended December 31, 2013, excluding non-cash charges 3,961 — 3,961 Cash payments (3,936 ) (1,700 ) (5,636 ) Accrued liability as of December 31, 2013 756 — 756 Costs incurred and charged to expense for the year ended December 31, 2014 4,992 — 4,992 Cash payments (5,299 ) — (5,299 ) Accrued liability as of December 31, 2014 449 — 449 Costs incurred and charged to expense for the period to date in 2015 5,279 — 5,279 Cash payments (4,324 ) — (4,324 ) Accrued liability as of December 31, 2015 $ 1,404 $ — $ 1,404 |
Lease Exit and Related Charges
Lease Exit and Related Charges (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure Changes To Accrued Loss On Excess Office Facilities [Abstract] | |
Schedule Of Accrued Loss On Excess Office Facilities | Changes to the accrued loss on excess office facilities (in thousands): Years Ended December 31, 2015 2014 2013 Accrued loss, beginning of year $ 234 $ 254 $ 4,213 Additions and adjustments to the lease loss accrual, including sublease income estimate revision, and related asset write-downs 2,981 668 1,421 Less amounts paid, net of sublease income (620 ) (688 ) (5,380 ) Accrued loss, end of year 2,595 234 254 Less current portion (included in Accrued and other current liabilities) (822 ) (234 ) (254 ) Accrued loss, non-current portion (included in Other long term liabilities) $ 1,773 $ — $ — |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in components of accumulated other comprehensive income (in thousands): Years Ended December 31, 2015 2014 2013 Investments Accumulated other comprehensive income (loss), beginning of period $ 2,252 $ 6,397 $ 26,685 Unrealized gains (losses), net of tax effects of $0, $0, and $(54) (562 ) (1,774 ) 2,121 Reclassification adjustments for losses (gains) included in other income (expense), net of tax effects of $0, $4, and $(800) (393 ) (2,371 ) (22,409 ) Net current period other comprehensive income (955 ) (4,145 ) (20,288 ) Accumulated other comprehensive income (loss) balance, end of period $ 1,297 $ 2,252 $ 6,397 Foreign currency translation Accumulated other comprehensive income (loss), beginning of period $ (57,504 ) $ (54,092 ) $ (53,225 ) Translation adjustments (3,009 ) (3,364 ) (296 ) Reclassification adjustments for losses (gains) included in other income (expense) (264 ) (48 ) (571 ) Net current period other comprehensive income (3,273 ) (3,412 ) (867 ) Accumulated other comprehensive loss balance, end of period $ (60,777 ) $ (57,504 ) $ (54,092 ) Total accumulated other comprehensive income (loss), end of period $ (59,480 ) $ (55,252 ) $ (47,695 ) |
Employee Stock and Benefit Pl38
Employee Stock and Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Total Stock-based Compensation Expense | Stock-based compensation expense recognized in our consolidated statements of operations includes amounts related to stock options, restricted stock, and employee stock purchase plans and was as follows (in thousands): Years Ended December 31, 2015 2014 2013 Total stock-based compensation expense $ 4,698 $ 5,204 $ 7,468 |
Weighted-Average Assumptions Used to Determine Fair Value of Options Granted | The fair value of options granted used the following weighted average assumptions: Years ended December 31, 2015 2014 2013 Expected dividend yield — % — % — % Risk-free interest rate 1.47 % 1.40 % 0.86 % Expected term (years) 4.8 4.5 4.3 Volatility 38 % 41 % 48 % |
Schedule of Nonvested Restricted Stock Units Activity | Restricted stock unit and award activity was as follows (shares are in thousands): Shares Weighted Average Grant Date Fair Value Per Share Total Grant Date Fair Value of Vested Awards (000's) Nonvested shares, December 31, 2012 1,249 $ 8.52 Granted 232 7.18 Vested (581 ) 9.13 $ 4,438 Forfeited/Canceled (410 ) 7.74 Nonvested shares, December 31, 2013 490 $ 7.80 Granted 159 7.60 Vested (193 ) 8.35 $ 1,608 Forfeited/Canceled (56 ) 7.73 Nonvested shares, December 31, 2014 400 $ 7.47 Granted 296 5.44 Vested (109 ) 7.01 $ 763 Forfeited/Canceled (263 ) 7.27 Nonvested shares, December 31, 2015 324 $ 5.94 |
Schedule of Stock Options and Restricted Stock Units Activity | Stock option activity (shares are in thousands): Options Outstanding Weighted Average Grant Date Fair Value Number of Shares Weighted Average Exercise Price Outstanding, December 31, 2012 4,534 $ 14.07 Options granted at common stock price 3,578 7.56 $ 2.93 Options exercised (24 ) 5.56 Options cancelled (1,463 ) 15.76 Outstanding, December 31, 2013 6,625 $ 10.21 Options granted at common stock price 2,036 7.44 $ 2.51 Options exercised (44 ) 7.26 Options cancelled (1,893 ) 14.47 Outstanding, December 31, 2014 6,724 $ 8.19 Options granted at common stock price 907 5.31 $ 1.70 Options exercised (14 ) 1.92 Options cancelled (2,100 ) 8.59 Outstanding, December 31, 2015 5,517 $ 7.58 Exercisable, December 31, 2015 2,894 $ 8.26 Vested and expected to vest, December 31, 2015 5,416 $ 7.61 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income (Loss) Before Income Taxes | Components of income (loss) before income taxes (in thousands): Years ended December 31, 2015 2014 2013 United States operations $ (76,450 ) $ (67,186 ) $ (50,032 ) Foreign operations (6,231 ) (3,349 ) (4,055 ) Income (loss) before income taxes $ (82,681 ) $ (70,535 ) $ (54,087 ) |
Schedule of Components of Income Tax Expense (Benefit) | Components of income tax expense (benefit) (in thousands): Years ended December 31, 2015 2014 2013 Current: United States federal $ 176 $ 547 $ 2,460 State and local (44 ) 69 61 Foreign 592 901 1,706 Total current 724 1,517 4,227 Deferred: United States federal (1,636 ) 21 (1,890 ) State and local 1 (40 ) 51 Foreign 77 (218 ) 2,515 Total deferred (1,558 ) (237 ) 676 Total income tax expense (benefit) $ (834 ) $ 1,280 $ 4,903 |
Schedule of Effective Income Tax Rate Reconciliation | Income tax expense differs from “expected” income tax expense (computed by applying the U.S. federal income tax rate of 35% ) due to the following (in thousands): Years ended December 31, 2015 2014 2013 United States federal tax expense (benefit) at statutory rate $ (28,938 ) $ (24,687 ) $ (18,930 ) State taxes, net of United States federal tax expense (benefit) (1,240 ) (1,083 ) (841 ) Change in valuation allowance 27,821 27,759 25,046 Non-deductible stock compensation 218 270 415 Impact of non-U.S. jurisdictional tax rate difference 648 529 487 Research and development tax credit (243 ) (325 ) (1,632 ) Increase (reversal) of unrecognized tax benefits (1,269 ) (901 ) 671 Non-U.S. withholding tax 141 393 1,805 Other 2,028 (675 ) (2,118 ) Total income tax expense (benefit) $ (834 ) $ 1,280 $ 4,903 |
Schedule of Net Deferred Tax Assets | Net deferred tax assets are comprised of the following (in thousands): December 31, 2015 2014 Deferred tax assets: United States federal net operating loss carryforwards $ 84,426 $ 66,547 Deferred expenses 1,591 2,552 Research and development tax credit carryforwards 24,442 22,979 Alternative minimum tax credit carryforward 3,626 3,626 Net unrealized loss on investments 97 97 Accrued loss on excess office facilities 959 — Stock-based compensation 11,441 11,398 State net operating loss carryforwards 10,079 8,400 Foreign net operating loss carryforwards 30,657 34,210 Deferred revenue 82 401 Equipment, software, and leasehold improvements 4,263 3,252 Intangibles 12 19 Other 5,150 4,332 Gross deferred tax assets 176,825 157,813 Less valuation allowance 173,872 149,474 Gross deferred tax assets, net of valuation allowance $ 2,953 $ 8,339 Deferred tax liabilities: Other intangible assets $ (404 ) $ (3,035 ) Net unrealized gains and basis differences on investments (78 ) (4,226 ) Other (218 ) (397 ) Prepaid expenses (1,384 ) (1,360 ) Gross deferred tax liabilities (2,084 ) (9,018 ) Net deferred tax assets (liabilities) $ 869 $ (679 ) |
Schedule of Unrecognized Tax Benefits | Reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits (in thousands): Years ended December 31, 2015 2014 2013 Balance, beginning of year $ 3,541 $ 4,505 $ 3,978 Decreases related to prior year tax positions (33 ) (196 ) (125 ) Settlements with taxing authorities (3,285 ) — — Increases related to current year tax positions 97 130 652 Expiration of the statute of limitations — (898 ) — Balance, end of year $ 320 $ 3,541 $ 4,505 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Calculation of Basic and Diluted Earnings Per Share | Basic and diluted net income (loss) per share (EPS) (in thousands, except per share data): Years ended December 31, 2015 2014 2013 Net income (loss) $ (81,847 ) $ (71,815 ) $ (58,990 ) Weighted average common shares outstanding used to compute basic EPS 36,165 35,947 35,553 Dilutive effect of stock based awards — — — Weighted average common shares outstanding used to compute diluted EPS 36,165 35,947 35,553 Basic EPS $ (2.26 ) $ (2.00 ) $ (1.66 ) Diluted EPS $ (2.26 ) $ (2.00 ) $ (1.66 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments | Future minimum payments as of December 31, 2015 are as follows (in thousands): Office Leases 2016 $ 6,550 2017 5,046 2018 3,648 2019 3,685 2020 3,618 Thereafter 13,712 Total minimum payments $ 36,259 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Results | Segment results for the years ended December 31, 2015 , 2014 and 2013 were as follows (in thousands): RealPlayer Group 2015 2014 2013 Revenue $ 29,141 $ 39,201 $ 75,206 Cost of revenue 16,171 14,508 16,220 Gross profit 12,970 24,693 58,986 Operating expenses 47,149 55,742 60,484 Operating income (loss) $ (34,179 ) $ (31,049 ) $ (1,498 ) Mobile Entertainment 2015 2014 2013 Revenue $ 65,407 $ 79,901 $ 81,181 Cost of revenue 44,212 50,399 47,608 Gross profit 21,195 29,502 33,573 Operating expenses 20,256 33,325 35,839 Operating income (loss) $ 939 $ (3,823 ) $ (2,266 ) Games 2015 2014 2013 Revenue $ 30,748 $ 37,110 $ 49,809 Cost of revenue 9,291 11,074 13,359 Gross profit 21,457 26,036 36,450 Operating expenses 29,086 37,170 47,177 Operating income (loss) $ (7,629 ) $ (11,134 ) $ (10,727 ) Corporate 2015 2014 2013 Cost of revenue $ 623 $ 400 $ 1,904 Extinguishment of liability — (10,580 ) — Operating expenses 27,695 33,327 54,413 Operating income (loss) $ (28,318 ) $ (23,147 ) $ (56,317 ) |
Revenue by Geographic Region | Our customers consist primarily of consumers and corporations located in the U.S., Europe, Republic of Korea and various foreign countries (Rest of the World). Revenue by geographic region (in thousands): Years ended December 31, 2015 2014 2013 United States $ 46,893 $ 61,660 $ 90,250 Europe 15,166 26,575 38,155 Republic of Korea 37,832 39,852 46,601 Rest of the World 25,405 28,125 31,190 Total $ 125,296 $ 156,212 $ 206,196 |
Long-Lived Assets by Geographic Region | Long-lived assets (consists of equipment, software, leasehold improvements, other intangible assets, and goodwill) by geographic region (in thousands): December 31, 2015 2014 2013 United States $ 16,821 $ 33,421 $ 40,347 Europe 4,898 6,696 8,280 Republic of Korea 282 547 936 Rest of the World 2,015 3,048 4,078 Total long-lived assets $ 24,016 $ 43,712 $ 53,641 |
Quarterly Information (Unaudi43
Quarterly Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following table summarizes the unaudited statement of operations for each quarter of 2015 and 2014 (in thousands, except per share data): Total Dec. 31 Sept. 30 June 30 Mar. 31 (2) 2015 Net revenue $ 125,296 $ 29,922 $ 30,823 $ 33,954 $ 30,597 Gross profit 54,999 14,094 12,733 14,122 14,050 Operating (loss) income (69,187 ) (7,506 ) (21,962 ) (20,707 ) (19,012 ) Net income (loss) (81,847 ) (8,413 ) (21,184 ) (27,781 ) (24,469 ) Basic net income (loss) per share (1) (2.26 ) (0.23 ) (0.59 ) (0.77 ) (0.68 ) Diluted net income (loss) per share (1) (2.26 ) (0.23 ) (0.59 ) (0.77 ) (0.68 ) 2014 Net revenue $ 156,212 $ 35,506 $ 34,157 $ 40,825 $ 45,724 Gross profit 90,411 17,625 15,229 20,039 37,518 Operating (loss) income (69,153 ) (20,682 ) (20,763 ) (18,832 ) (8,876 ) Net income (loss) (71,815 ) (20,838 ) (22,178 ) (21,029 ) (7,770 ) Basic net income (loss) per share (1) (2.00 ) (0.58 ) (0.62 ) (0.59 ) (0.22 ) Diluted net income (loss) per share (1) (2.00 ) (0.58 ) (0.62 ) (0.59 ) (0.22 ) (1) The sum of the quarterly net income per share amounts will not necessarily equal net income per share for the year due to the use of weighted average quarterly shares and the effects of rounding. (2) In the quarter ended March 31, 2014, certain accrued royalty liabilities of $10.6 million associated with our historical music business, which had originally been recorded based on statutory rates, were extinguished. |
Description of Business and S44
Description of Business and Summary of Significant Accounting Policies (Narrative) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Depreciation and Amortization | |||
Depreciation expense | $ 8.1 | $ 8.5 | $ 14.3 |
Deferred Costs | |||
Impairment of ongoing project, deferred costs | 0.7 | ||
Advertising Expense | |||
Advertising expense | $ 16.5 | $ 23.1 | $ 30.6 |
Equipment and Software | Minimum | |||
Depreciation and Amortization | |||
Useful life (in years) | 3 years | ||
Equipment and Software | Maximum | |||
Depreciation and Amortization | |||
Useful life (in years) | 5 years |
Acquisitions and Disposals (Det
Acquisitions and Disposals (Details) - USD ($) $ in Thousands | Jul. 24, 2015 | Jun. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 13,080 | $ 17,355 | $ 17,476 | |||
Cash received | $ 10,000 | $ 0 | $ 0 | |||
Slingo and Social Casino | ||||||
Business Acquisition [Line Items] | ||||||
Sale price | $ 18,000 | |||||
Cash received | 10,000 | |||||
Proceeds receivable | 8,000 | |||||
Intangible assets disposed of | 5,700 | |||||
Net property, plant and equipment disposed of | 300 | |||||
Other net assets disposed of | 400 | |||||
Deferred tax liabilities disposed of | 1,600 | |||||
Goodwill disposed of | 3,600 | |||||
Foreign currency gain | 500 | |||||
Income tax benefit | 1,600 | |||||
Deferred gain recognized | $ 8,000 | |||||
Slingo, Inc | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of voting interests acquired | 100.00% | |||||
Payments to acquire businesses | $ 15,600 | |||||
Intangible assets acquired | 8,000 | |||||
Deferred tax liability recorded | 2,700 | |||||
Goodwill | 9,900 | |||||
Slingo, Inc | Developed Technology and Customer Relationships | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | 3,500 | |||||
Slingo, Inc | Trademarks and tradenames | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | $ 4,500 | |||||
Muzicall Ltd | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of voting interests acquired | 100.00% | |||||
Payments to acquire businesses | $ 6,700 | |||||
Goodwill | 1,300 | |||||
Deferred tax assets recorded | 3,400 | |||||
Muzicall Ltd | Developed Technology, tradenames and trademarks and customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | $ 5,400 |
Rhapsody Joint Venture (Additio
Rhapsody Joint Venture (Additional Information) (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2010 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Equity Method Investments [Line Items] | |||||
Cash payments | $ 4,324 | $ 5,299 | $ 5,636 | ||
Losses recorded in the operations of Rhapsody | 14,521 | 4,452 | 6,268 | ||
Carrying value of Rhapsody investment | 0 | 10,000 | |||
Advance to Rhapsody | $ 5,000 | 0 | 0 | ||
Rhapsody America LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership interest (percent) | 43.00% | ||||
Cash payments | $ 18,000 | ||||
Liquidation preference | $ 10,000 | ||||
Losses recorded in the operations of Rhapsody | 14,500 | 4,500 | $ 6,300 | ||
Carrying value of Rhapsody investment | $ 0 | $ 10,000 | |||
Advance to Rhapsody | $ 5,000 | ||||
Effective interest rate (as a percent) | 9.00% | ||||
Interest income from related party | $ 200 | ||||
Prime Rate | Rhapsody America LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Basis spread on variable rate (as a percent) | 5.25% |
Rhapsody Joint Venture (Summari
Rhapsody Joint Venture (Summarized Financial Information for Rhapsody) (Detail) - Rhapsody America LLC - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Gross Profit (Loss) | |||
Net revenue | $ 201,987 | $ 173,484 | $ 140,596 |
Gross profit | 32,761 | 32,145 | 34,141 |
Net loss | (35,479) | (21,336) | $ (14,663) |
Assets and Liabilities | |||
Current assets | 53,274 | 47,021 | |
Non-current assets | 20,520 | 20,616 | |
Current liabilities | 92,794 | 65,458 | |
Non-current liabilities | $ 20,295 | $ 16,487 |
Fair Value Measurements (Financ
Fair Value Measurements (Financial Assets Measured at Fair Value on a Recurring Basis) (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | $ 104,793 | $ 167,382 |
Amortized Cost | 102,429 | 165,121 |
Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 47,315 | 103,253 |
Amortized Cost | 47,315 | 103,255 |
Cash and Cash Equivalents | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 23,152 | 30,105 |
Amortized Cost | 23,152 | 30,105 |
Cash and Cash Equivalents | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 5,061 | 11,629 |
Amortized Cost | 5,061 | 11,630 |
Cash and Cash Equivalents | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 19,102 | 61,519 |
Amortized Cost | 19,102 | 61,520 |
Short-term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 51,814 | 58,453 |
Amortized Cost | 51,862 | 58,438 |
Short-term Investments | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 51,814 | 51,453 |
Amortized Cost | 51,862 | 51,438 |
Short-term Investments | U.S. government agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 7,000 | |
Amortized Cost | 7,000 | |
Restricted cash equivalents and investments | Restricted cash equivalents and investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 2,890 | 3,000 |
Amortized Cost | 2,890 | 3,000 |
Equity investments in publicly traded securities | Equity investments in publicly traded securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 1,721 | 2,676 |
Amortized Cost | 362 | 428 |
Related Party Investment | Warrant issued by Rhapsody (included in Other assets) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 1,053 | |
Amortized Cost | 0 | |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 29,934 | 51,410 |
Level 1 | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 28,213 | 41,734 |
Level 1 | Cash and Cash Equivalents | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 23,152 | 30,105 |
Level 1 | Cash and Cash Equivalents | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 5,061 | 11,629 |
Level 1 | Cash and Cash Equivalents | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 1 | Short-term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 7,000 |
Level 1 | Short-term Investments | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 1 | Short-term Investments | U.S. government agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 7,000 | |
Level 1 | Restricted cash equivalents and investments | Restricted cash equivalents and investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 1 | Equity investments in publicly traded securities | Equity investments in publicly traded securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 1,721 | 2,676 |
Level 1 | Related Party Investment | Warrant issued by Rhapsody (included in Other assets) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 73,806 | 115,972 |
Level 2 | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 19,102 | 61,519 |
Level 2 | Cash and Cash Equivalents | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 2 | Cash and Cash Equivalents | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 2 | Cash and Cash Equivalents | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 19,102 | 61,519 |
Level 2 | Short-term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 51,814 | 51,453 |
Level 2 | Short-term Investments | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 51,814 | 51,453 |
Level 2 | Short-term Investments | U.S. government agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | |
Level 2 | Restricted cash equivalents and investments | Restricted cash equivalents and investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 2,890 | 3,000 |
Level 2 | Equity investments in publicly traded securities | Equity investments in publicly traded securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 2 | Related Party Investment | Warrant issued by Rhapsody (included in Other assets) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 1,053 | 0 |
Level 3 | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 3 | Cash and Cash Equivalents | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 3 | Cash and Cash Equivalents | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 3 | Cash and Cash Equivalents | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 3 | Short-term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 3 | Short-term Investments | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 3 | Short-term Investments | U.S. government agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | |
Level 3 | Restricted cash equivalents and investments | Restricted cash equivalents and investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | 0 |
Level 3 | Equity investments in publicly traded securities | Equity investments in publicly traded securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 0 | $ 0 |
Level 3 | Related Party Investment | Warrant issued by Rhapsody (included in Other assets) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | $ 1,053 |
Fair Value Measurements (Short-
Fair Value Measurements (Short-term Investments) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | $ 104,793 | $ 167,382 |
Short-term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 51,814 | $ 58,453 |
Estimated Fair Value | Short-term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 51,814 | |
Estimated Fair Value | Within one year | Short-term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | 51,389 | |
Estimated Fair Value | Between one year and five years | Short-term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets fair value | $ 425 |
Fair Value Measurements (Additi
Fair Value Measurements (Additional Information) (Detail) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Proceeds from sale of equity and other investments | $ (459) | $ (2,754) | $ (29,153) | |
Gain (loss) on sale of equity and other investments, net | (159) | 2,371 | 21,389 | |
Financial assets fair value | 104,793 | 167,382 | ||
J-Stream, Inc. | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Proceeds from sale of equity and other investments | (500) | (2,800) | ||
Gain (loss) on sale of equity and other investments, net | 400 | $ 2,400 | ||
LoEn Entertainment, Inc | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Proceeds from sale of equity and other investments | (29,200) | |||
Gain (loss) on sale of equity and other investments, net | $ 21,400 | |||
Warrant | Related Party Debt Obligation | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Expected term (in years) | 5 years | |||
Expected volatility rate (as a percent) | 55.00% | |||
Financial assets fair value | $ 1,200 | |||
Loss on warrants | $ (100) |
Allowance for Doubtful Accoun51
Allowance for Doubtful Accounts Receivable and Sales Returns (Activity in Allowance for Doubtful Accounts Receivable and Sales Returns) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning Balance | $ 1,642 | $ 1,535 | |
Ending Balance | 923 | 1,642 | $ 1,535 |
Allowance for Doubtful Accounts Receivable | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning Balance | 1,288 | 966 | 1,010 |
Addition (reduction) to allowance | (355) | 433 | (2) |
Amounts written off | (77) | 0 | (83) |
Effects of foreign currency translation | (91) | (111) | 41 |
Ending Balance | 765 | 1,288 | 966 |
Allowance for Sales Returns | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning Balance | 354 | 569 | 653 |
Addition (reduction) to allowance | (186) | (209) | (64) |
Amounts written off | (9) | (6) | (21) |
Effects of foreign currency translation | (1) | 0 | 1 |
Ending Balance | $ 158 | $ 354 | $ 569 |
Allowance for Doubtful Accoun52
Allowance for Doubtful Accounts Receivable and Sales Returns (Additional Information) (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | [1] | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | [1] | Dec. 31, 2015USD ($)Customer | Dec. 31, 2014USD ($)Customer | Dec. 31, 2013USD ($)Customer | ||||
Concentration Risk [Line Items] | ||||||||||||||||
Net revenue | $ 29,922 | $ 30,823 | $ 33,954 | $ 30,597 | $ 35,506 | $ 34,157 | $ 40,825 | $ 45,724 | $ 125,296 | [2] | $ 156,212 | [2] | $ 206,196 | [2] | ||
Accounts Receivable | Company A | ||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||
Number of major customers | Customer | 1 | 1 | ||||||||||||||
Percentage by major customer | 52.00% | 21.00% | ||||||||||||||
Accounts Receivable | Company B | ||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||
Number of major customers | Customer | 1 | 1 | ||||||||||||||
Percentage by major customer | 12.00% | 15.00% | ||||||||||||||
Mobile Entertainment | ||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||
Net revenue | $ 65,407 | $ 79,901 | $ 81,181 | |||||||||||||
Mobile Entertainment | Revenue by Segment | ||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||
Number of major customers | Customer | 1 | 1 | 1 | |||||||||||||
Percentage by major customer | 26.00% | 20.00% | 13.00% | |||||||||||||
Net revenue | $ 32,900 | $ 31,900 | $ 26,400 | |||||||||||||
RealPlayer Group | ||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||
Net revenue | $ 29,141 | $ 39,201 | $ 75,206 | |||||||||||||
RealPlayer Group | Revenue by Segment | ||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||
Number of major customers | Customer | 1 | |||||||||||||||
Percentage by major customer | 13.00% | |||||||||||||||
Net revenue | $ 27,000 | |||||||||||||||
[1] | In the quarter ended March 31, 2014, certain accrued royalty liabilities of $10.6 million associated with our historical music business, which had originally been recorded based on statutory rates, were extinguished. | |||||||||||||||
[2] | December 31, 2013 December 31, 2012 December 31, 2011Components of Revenue License Fees28,422 28,308 43,709Service Revenue96,874 127,904 162,487Net Revenue125,296 156,212 206,196 |
Other Intangible Assets (Schedu
Other Intangible Assets (Schedule of Intangible Asset by Class) (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Jul. 24, 2015 | Dec. 31, 2014 |
Schedule of Finite-Lived Intangible Assets and Indefinite-lived intangible assets [Line Items] | |||
Gross Amount | $ 63,215 | $ 72,243 | |
Accumulated Amortization | 61,079 | 66,634 | |
Net | 2,136 | 5,609 | |
Intangible Assets, Gross | 63,215 | 76,743 | |
Intangible Assets, Net | 2,136 | 10,109 | |
Slingo and Social Casino | |||
Schedule of Finite-Lived Intangible Assets and Indefinite-lived intangible assets [Line Items] | |||
Intangible assets disposed of | $ 5,700 | ||
Trademarks and tradenames | |||
Schedule of Finite-Lived Intangible Assets and Indefinite-lived intangible assets [Line Items] | |||
Indefinite-Lived Intangible Assets | 0 | 4,500 | |
Customer relationships | |||
Schedule of Finite-Lived Intangible Assets and Indefinite-lived intangible assets [Line Items] | |||
Gross Amount | 30,182 | 33,853 | |
Accumulated Amortization | 29,236 | 31,643 | |
Net | 946 | 2,210 | |
Developed technology | |||
Schedule of Finite-Lived Intangible Assets and Indefinite-lived intangible assets [Line Items] | |||
Gross Amount | 24,047 | 28,261 | |
Accumulated Amortization | 23,244 | 25,699 | |
Net | 803 | 2,562 | |
Patents, trademarks and tradenames | |||
Schedule of Finite-Lived Intangible Assets and Indefinite-lived intangible assets [Line Items] | |||
Gross Amount | 3,717 | 3,817 | |
Accumulated Amortization | 3,398 | 3,528 | |
Net | 319 | 289 | |
Service contracts | |||
Schedule of Finite-Lived Intangible Assets and Indefinite-lived intangible assets [Line Items] | |||
Gross Amount | 5,269 | 6,312 | |
Accumulated Amortization | 5,201 | 5,764 | |
Net | $ 68 | $ 548 |
Other Intangible Assets (Additi
Other Intangible Assets (Additional Information and Expected Amortization) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 2,300 | $ 3,400 | $ 4,400 |
Amortization Expense, Fiscal Year Maturity [Abstract] | |||
2,016 | 1,096 | ||
2,017 | 686 | ||
2,018 | 354 | ||
Net | $ 2,136 | $ 5,609 |
Goodwill (Changes in Goodwill)
Goodwill (Changes in Goodwill) (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Roll Forward] | ||
Balance, beginning of year, Goodwill, gross | $ 328,008 | $ 328,129 |
Balance, beginning of year, Accumulated impairment lossses | (310,653) | (310,653) |
Balance, beginning of year, Goodwill, Net | 17,355 | 17,476 |
Increases (decreases) due to current year acquisitions (disposals) | (3,620) | 460 |
Effects of foreign currency translation | (655) | (581) |
Total goodwill increase (decrease) | (4,275) | (121) |
Balance, end of year, Goodwill, gross | 323,733 | 328,008 |
Balance, end of year, Accumulated impairment lossses | (310,653) | (310,653) |
Balance, end of year, Goodwill, Net | $ 13,080 | $ 17,355 |
Goodwill (Goodwill by Segments
Goodwill (Goodwill by Segments and Acquisition) (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||||
Jun. 30, 2014 | Dec. 31, 2015 | Jul. 24, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill [Line Items] | |||||
Goodwill | $ 13,080 | $ 17,355 | $ 17,476 | ||
RealPlayer Group | |||||
Goodwill [Line Items] | |||||
Goodwill acquired during period | $ 500 | ||||
Slingo and Social Casino | |||||
Goodwill [Line Items] | |||||
Goodwill disposed of | $ 3,600 | ||||
RealPlayer Group | |||||
Goodwill [Line Items] | |||||
Goodwill | 945 | 985 | |||
Mobile Entertainment | |||||
Goodwill [Line Items] | |||||
Goodwill | 1,837 | 1,976 | |||
Games | |||||
Goodwill [Line Items] | |||||
Goodwill | $ 10,298 | $ 14,394 |
Accrued and Other Current Lia57
Accrued and Other Current Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Royalties and other fulfillment costs | $ 3,094 | $ 4,868 |
Employee compensation, commissions and benefits | 5,958 | 7,711 |
Sales, VAT and other taxes payable | 2,976 | 5,896 |
Other | 5,292 | 6,811 |
Total accrued and other current liabilities | $ 17,320 | $ 25,286 |
Restructuring Charges (Details)
Restructuring Charges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Restructuring Cost and Reserve [Line Items] | |||
Costs incurred and charged to expense | $ 5,279 | $ 4,992 | $ 5,765 |
Restructuring Reserve [Roll Forward] | |||
Accrued liability beginning balance | 449 | 756 | 2,431 |
Costs incurred and charged to expense | 5,279 | 4,992 | 3,961 |
Cash payments | (4,324) | (5,299) | (5,636) |
Accrued liability ending balance | 1,404 | 449 | 756 |
Facility Relocation | |||
Restructuring Cost and Reserve [Line Items] | |||
Costs incurred and charged to expense | 1,800 | ||
Employee Separation Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Costs incurred and charged to expense | 5,279 | 4,992 | 3,961 |
Restructuring Reserve [Roll Forward] | |||
Accrued liability beginning balance | 449 | 756 | 731 |
Costs incurred and charged to expense | 5,279 | 4,992 | 3,961 |
Cash payments | (4,324) | (5,299) | (3,936) |
Accrued liability ending balance | 1,404 | 449 | 756 |
Asset Related and Other Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Costs incurred and charged to expense | 0 | 0 | 1,804 |
Contract Assignment Costs | |||
Restructuring Reserve [Roll Forward] | |||
Accrued liability beginning balance | 0 | 0 | 1,700 |
Costs incurred and charged to expense | 0 | 0 | 0 |
Cash payments | 0 | 0 | (1,700) |
Accrued liability ending balance | $ 0 | $ 0 | $ 0 |
Lease Exit and Related Charge59
Lease Exit and Related Charges (Changes to Accrued Loss on Excess Office Facilities) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Disclosure Changes To Accrued Loss On Excess Office Facilities [Abstract] | ||||
Lease exit and related charges | $ 2,100 | $ 2,501 | $ 880 | $ 3,089 |
Percent reduction in office space | 43.00% | |||
Accrued Loss on Excess Office Facilities [Roll Forward] | ||||
Accrued loss, beginning of year | 234 | 254 | 4,213 | |
Additions and adjustments to the lease loss accrual, including sublease income estimate revision, and related asset write-downs | 2,981 | 668 | 1,421 | |
Less amounts paid, net of sublease income | (620) | (688) | (5,380) | |
Accrued loss, end of year | 2,595 | 234 | 254 | |
Less current portion (included in Accrued and other current liabilities) | (822) | (234) | (254) | |
Accrued loss, non-current portion (included in Other long term liabilities) | $ 1,773 | $ 0 | $ 0 |
Shareholders_ Equity (Accumulat
Shareholders’ Equity (Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Accumulated other comprehensive income (loss), beginning of period | $ (55,252) | $ (47,695) | |
Unrealized gains (losses), net of tax effects of $0, $0, and $(54) | (955) | (4,145) | $ (20,288) |
Net current period other comprehensive income | (4,228) | (7,557) | (21,155) |
Accumulated other comprehensive loss balance, end of period | (59,480) | (55,252) | (47,695) |
Investments | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Accumulated other comprehensive income (loss), beginning of period | 2,252 | 6,397 | 26,685 |
Unrealized gains (losses), net of tax effects of $0, $0, and $(54) | (562) | (1,774) | 2,121 |
Reclassification adjustments for losses (gains) included in other income (expense) | (393) | (2,371) | (22,409) |
Net current period other comprehensive income | (955) | (4,145) | (20,288) |
Accumulated other comprehensive loss balance, end of period | 1,297 | 2,252 | 6,397 |
Accumulated Other Comprehensive Income (Loss), Tax [Abstract] | |||
Unrealized gains (losses), tax effects | 0 | 0 | (54) |
Reclassification adjustments for losses (gains) included in other income (expense), tax effects | 0 | 4 | (800) |
Foreign currency translation | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Accumulated other comprehensive income (loss), beginning of period | (57,504) | (54,092) | (53,225) |
Translation adjustments | (3,009) | (3,364) | (296) |
Reclassification adjustments for losses (gains) included in other income (expense) | (264) | (48) | (571) |
Net current period other comprehensive income | (3,273) | (3,412) | (867) |
Accumulated other comprehensive loss balance, end of period | $ (60,777) | $ (57,504) | $ (54,092) |
Shareholders_ Equity (Narrative
Shareholders’ Equity (Narrative) (Details) | Dec. 31, 2015vote |
Preferred stock, Series A | |
Class of Stock [Line Items] | |
Number of votes available | 1,000 |
Employee Stock and Benefit Pl62
Employee Stock and Benefit Plans (Equity Compensation Plans Narrative) (Details) $ in Thousands, shares in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock reserved for future issuance | shares | 8.2 | ||
Capital shares reserved for future issuance | shares | 0.4 | ||
Total stock-based compensation expense | $ | $ 4,698 | $ 5,204 | $ 7,468 |
Total unrecognized compensation cost | $ | $ 9,000 | ||
Total unrecognized compensation cost, expected recognition period (in years) | 2 years | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 4 years | ||
Stock Options | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expiration period (in years) | 7 years | ||
Restricted Stock | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 2 years | ||
Restricted Stock | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 4 years | ||
2005 Plan | Restricted Stock Unit | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Factor for increase | 1.6 |
Employee Stock and Benefit Pl63
Employee Stock and Benefit Plans (Weighted-Average Assumptions Used to Determine Fair Value of Options Granted) (Detail) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Risk-free interest rate (as a percent) | 1.47% | 1.40% | 0.86% |
Expected term (in years) | 4 years 9 months | 4 years 6 months | 4 years 3 months |
Volatility (as a percent) | 38.00% | 41.00% | 48.00% |
Employee Stock and Benefit Pl64
Employee Stock and Benefit Plans (Restricted Stock Unit and Award Activity) (Details) - Restricted Stock Unit - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Number of Shares [Roll Forward] | |||
Nonvested shares, beginning of year (in shares) | 400 | 490 | 1,249 |
Granted (in shares) | 296 | 159 | 232 |
Vested (in shares) | (109) | (193) | (581) |
Forfeited/Canceled (in shares) | (263) | (56) | (410) |
Nonvested shares, end of year (in shares) | 324 | 400 | 490 |
Weighted Average Grant Date Fair Value [Roll Forward] | |||
Nonvested shares, beginning of year (in dollars per share) | $ 7.47 | $ 7.80 | $ 8.52 |
Granted (in dollars per share) | 5.44 | 7.60 | 7.18 |
Vested (in dollars per share) | 7.01 | 8.35 | 9.13 |
Forfeited/Canceled (in dollars per share) | 7.27 | 7.73 | 7.74 |
Nonvested shares, beginning of year (in dollars per share) | $ 5.94 | $ 7.47 | $ 7.80 |
Total Fair Value of Vested Awards | |||
Total fair value of vested awards | $ 763 | $ 1,608 | $ 4,438 |
Additional Information | |||
Aggregate intrinsic value, outstanding | $ 1,400 | ||
Weighted average remaining contractual term | 1 year |
Employee Stock and Benefit Pl65
Employee Stock and Benefit Plans (Stock Option Activity) (Details) - Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Options Outstanding, Number of Shares [Roll Forward] | |||
Number of shares, beginning balance | 6,724 | 6,625 | 4,534 |
Number of shares, Options granted at common stock price | 907 | 2,036 | 3,578 |
Number of shares, Options exercised | (14) | (44) | (24) |
Number of shares, Options cancelled | (2,100) | (1,893) | (1,463) |
Number of shares, ending balance | 5,517 | 6,724 | 6,625 |
Number of shares, Exercisable | 2,894 | ||
Number of shares, Vested and expected to vest | 5,416 | ||
Options Outstanding, Weighted Average Exercise Price [Roll Forward] | |||
Weighted average exercise price, beginning balance (in dollars per share) | $ 8.19 | $ 10.21 | $ 14.07 |
Weighted average exercise price, Options granted at common stock price (in dollars per share) | 5.31 | 7.44 | 7.56 |
Weighted average exercise price, Options exercised (in dollars per share) | 1.92 | 7.26 | 5.56 |
Weighted average exercise price, Options canceled (in dollars per share) | 8.59 | 14.47 | 15.76 |
Weighted average exercise price, ending balance (in dollars per share) | 7.58 | 8.19 | 10.21 |
Weighted average exercise price, exercisable (in dollars per share) | 8.26 | ||
Weighted average exercise price, vested and expected to vest (in dollars per share) | 7.61 | ||
Weighted Average Fair Value Grant | |||
Weighted average fair value grant, Options granted at common stock prrice (in dollars per share) | $ 1.70 | $ 2.51 | $ 2.93 |
Options, Additional Information | |||
Weighted average remaining contractual life, outstanding | 4 years 9 months 1 day | ||
Weighted average remaining contractual life, exercisable | 4 years | ||
Weighted average remaining contractual life, vested and expected to vest | 4 years 8 months 1 day | ||
Intrinsic value, options outstanding | $ 0.1 | ||
Intrinsic value, options vested and expected to vest | $ 0.1 | ||
Intrinsic value, options exercised | $ 0.1 |
Employee Stock and Benefit Pl66
Employee Stock and Benefit Plans (Employee Stock Purchase Plan Narrative) (Details) - Employee Stock Purchase Plan - shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Discount from market price percentage from ofering date | 85.00% | ||
Shares purchased under ESPP | 94,400 | 78,500 | 71,600 |
Employee Stock and Benefit Pl67
Employee Stock and Benefit Plans (Retirement Savings Plan Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Matching contribution percentage | 50.00% | ||
Maximum contributions per employee percentage | 3.00% | ||
Contribution amount | $ 0.6 | $ 0.7 | $ 0.8 |
Income Taxes (Components of Inc
Income Taxes (Components of Income (Loss) Before Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income (Loss) from Continuing Operations [Abstract] | |||
United States operations | $ (76,450) | $ (67,186) | $ (50,032) |
Foreign operations | (6,231) | (3,349) | (4,055) |
Income (loss) before income taxes | $ (82,681) | $ (70,535) | $ (54,087) |
Income Taxes (Components of I69
Income Taxes (Components of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||
United States federal | $ 176 | $ 547 | $ 2,460 |
State and local | (44) | 69 | 61 |
Foreign | 592 | 901 | 1,706 |
Total current | 724 | 1,517 | 4,227 |
Deferred: | |||
United States federal | (1,636) | 21 | (1,890) |
State and local | 1 | (40) | 51 |
Foreign | 77 | (218) | 2,515 |
Total deferred | (1,558) | (237) | 676 |
Total income tax expense (benefit) | $ (834) | $ 1,280 | $ 4,903 |
Income Taxes (Income Tax Rate R
Income Taxes (Income Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal income tax rate | 35.00% | 35.00% | 35.00% |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract] | |||
United States federal tax expense (benefit) at statutory rate | $ (28,938) | $ (24,687) | $ (18,930) |
State taxes, net of United States federal tax expense (benefit) | (1,240) | (1,083) | (841) |
Change in valuation allowance | 27,821 | 27,759 | 25,046 |
Non-deductible stock compensation | 218 | 270 | 415 |
Impact of non-U.S. jurisdictional tax rate difference | 648 | 529 | 487 |
Research and development tax credit | (243) | (325) | (1,632) |
Increase (reversal) of unrecognized tax benefits | (1,269) | (901) | 671 |
Non-U.S. withholding tax | 141 | 393 | 1,805 |
Other | 2,028 | (675) | (2,118) |
Total income tax expense (benefit) | $ (834) | $ 1,280 | $ 4,903 |
Income Taxes (Net Deferred Tax
Income Taxes (Net Deferred Tax Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred Tax Assets [Abstract] | ||
United States federal net operating loss carryforwards | $ 84,426 | $ 66,547 |
Deferred expenses | 1,591 | 2,552 |
Research and development tax credit carryforwards | 24,442 | 22,979 |
Alternative minimum tax credit carryforward | 3,626 | 3,626 |
Net unrealized loss on investments | 97 | 97 |
Accrued loss on excess office facilities | 959 | 0 |
Stock-based compensation | 11,441 | 11,398 |
State net operating loss carryforwards | 10,079 | 8,400 |
Foreign net operating loss carryforwards | 30,657 | 34,210 |
Deferred revenue | 82 | 401 |
Equipment, software, and leasehold improvements | 4,263 | 3,252 |
Intangibles | 12 | 19 |
Other | 5,150 | 4,332 |
Gross deferred tax assets | 176,825 | 157,813 |
Less valuation allowance | 173,872 | 149,474 |
Gross deferred tax assets, net of valuation allowance | 2,953 | 8,339 |
Deferred Tax Liabilities [Abstract] | ||
Other intangible assets | (404) | (3,035) |
Net unrealized gains and basis differences on investments | (78) | (4,226) |
Other | (218) | (397) |
Prepaid expenses | (1,384) | (1,360) |
Gross deferred tax liabilities | (2,084) | (9,018) |
Net deferred tax assets | $ 869 | |
Net deferred tax liabilities | $ (679) |
Income Taxes (Schedule of Unrec
Income Taxes (Schedule of Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance, beginning of year | $ 3,541 | $ 4,505 | $ 3,978 |
Decreases related to prior year tax positions | (33) | (196) | (125) |
Settlements with taxing authorities | (3,285) | 0 | 0 |
Increases related to current year tax positions | 97 | 130 | 652 |
Expiration of the statute of limitations | 0 | (898) | 0 |
Balance, end of year | $ 320 | $ 3,541 | $ 4,505 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax [Line Items] | ||||
Income tax receivables | $ 100 | $ 100 | ||
Valuation Allowance [Abstract] | ||||
Change in valuation allowance | 24,400 | 20,600 | ||
Valuation allowance | 173,872 | 149,474 | ||
Alternative minimum tax credit carryforward | 3,626 | 3,626 | ||
Research and development tax credit carryforwards | 24,442 | 22,979 | ||
Income Tax Uncertainties [Abstract] | ||||
Unrecognized tax benefits | 320 | 3,541 | $ 4,505 | $ 3,978 |
Income Tax Examination [Abstract] | ||||
Accrued interest and penalties related to uncertain tax positions | 0 | 0 | ||
Internal Revenue Service (IRS) | ||||
Valuation Allowance [Abstract] | ||||
Operating loss carryforwards | $ 241,200 | $ 190,100 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | [1] | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | [1] | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||
Net income (loss) | $ (8,413) | $ (21,184) | $ (27,781) | $ (24,469) | $ (20,838) | $ (22,178) | $ (21,029) | $ (7,770) | $ (81,847) | $ (71,815) | $ (58,990) | ||||||||||
Weighted average common shares outstanding used to compute basic EPS | 36,165 | 35,947 | 35,553 | ||||||||||||||||||
Dilutive effect of stock based awards | 0 | 0 | 0 | ||||||||||||||||||
Weighted average common shares outstanding used to compute diluted EPS | 36,165 | 35,947 | 35,553 | ||||||||||||||||||
Basic EPS (in dollars per share) | $ (0.23) | [2] | $ (0.59) | [2] | $ (0.77) | [2] | $ (0.68) | [2] | $ (0.58) | [2] | $ (0.62) | [2] | $ (0.59) | [2] | $ (0.22) | [2] | $ (2.26) | [2] | $ (2) | [2] | $ (1.66) |
Diluted EPS (in dollars per share) | $ (0.23) | [2] | $ (0.59) | [2] | $ (0.77) | [2] | $ (0.68) | [2] | $ (0.58) | [2] | $ (0.62) | [2] | $ (0.59) | [2] | $ (0.22) | [2] | $ (2.26) | [2] | $ (2) | [2] | $ (1.66) |
Shares of common stock excluded from the calculation of diluted net income per share because of antidilutive effect | 5,700 | 6,300 | 4,600 | ||||||||||||||||||
[1] | In the quarter ended March 31, 2014, certain accrued royalty liabilities of $10.6 million associated with our historical music business, which had originally been recorded based on statutory rates, were extinguished. | ||||||||||||||||||||
[2] | The sum of the quarterly net income per share amounts will not necessarily equal net income per share for the year due to the use of weighted average quarterly shares and the effects of rounding. |
Commitments and Contingencies75
Commitments and Contingencies (Commitments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Office Leases | |||
2,016 | $ 6,550 | ||
2,017 | 5,046 | ||
2,018 | 3,648 | ||
2,019 | 3,685 | ||
2,020 | 3,618 | ||
Thereafter | 13,712 | ||
Total minimum payments | 36,259 | ||
Rent expense | 5,800 | $ 6,800 | $ 8,300 |
Sublease income | 200 | $ 200 | $ 800 |
Accrued Loss on Excess Office Facilities | |||
Office Leases | |||
Total minimum payments | $ 2,600 |
Commitments and Contingencies76
Commitments and Contingencies (Litigation) (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2013USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Payments for litigation | $ 11.5 |
Segment Information (Narrative)
Segment Information (Narrative) (Detail) | 12 Months Ended |
Dec. 31, 2015Segment | |
Segment Reporting [Abstract] | |
Number of reporting segments | 3 |
Segment Information (Segment Re
Segment Information (Segment Results) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | [1] | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | [1] | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Revenue | $ 29,922 | $ 30,823 | $ 33,954 | $ 30,597 | $ 35,506 | $ 34,157 | $ 40,825 | $ 45,724 | $ 125,296 | [2] | $ 156,212 | [2] | $ 206,196 | [2] | |||
Cost of revenue | [3] | 70,297 | 76,381 | 79,091 | |||||||||||||
Extinguishment of liability | 0 | 10,580 | 0 | ||||||||||||||
Gross profit | 14,094 | 12,733 | 14,122 | 14,050 | 17,625 | 15,229 | 20,039 | 37,518 | 54,999 | 90,411 | 127,105 | ||||||
Operating expenses | 124,186 | 159,564 | 197,913 | ||||||||||||||
Operating (loss) income | $ (7,506) | $ (21,962) | $ (20,707) | $ (19,012) | $ (20,682) | $ (20,763) | $ (18,832) | $ (8,876) | (69,187) | (69,153) | (70,808) | ||||||
RealPlayer Group | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Revenue | 29,141 | 39,201 | 75,206 | ||||||||||||||
Cost of revenue | 16,171 | 14,508 | 16,220 | ||||||||||||||
Gross profit | 12,970 | 24,693 | 58,986 | ||||||||||||||
Operating expenses | 47,149 | 55,742 | 60,484 | ||||||||||||||
Operating (loss) income | (34,179) | (31,049) | (1,498) | ||||||||||||||
Mobile Entertainment | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Revenue | 65,407 | 79,901 | 81,181 | ||||||||||||||
Cost of revenue | 44,212 | 50,399 | 47,608 | ||||||||||||||
Gross profit | 21,195 | 29,502 | 33,573 | ||||||||||||||
Operating expenses | 20,256 | 33,325 | 35,839 | ||||||||||||||
Operating (loss) income | 939 | (3,823) | (2,266) | ||||||||||||||
Games | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Revenue | 30,748 | 37,110 | 49,809 | ||||||||||||||
Cost of revenue | 9,291 | 11,074 | 13,359 | ||||||||||||||
Gross profit | 21,457 | 26,036 | 36,450 | ||||||||||||||
Operating expenses | 29,086 | 37,170 | 47,177 | ||||||||||||||
Operating (loss) income | (7,629) | (11,134) | (10,727) | ||||||||||||||
Corporate | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Cost of revenue | 623 | 400 | 1,904 | ||||||||||||||
Extinguishment of liability | 0 | (10,580) | 0 | ||||||||||||||
Operating expenses | 27,695 | 33,327 | 54,413 | ||||||||||||||
Operating (loss) income | $ (28,318) | $ (23,147) | $ (56,317) | ||||||||||||||
[1] | In the quarter ended March 31, 2014, certain accrued royalty liabilities of $10.6 million associated with our historical music business, which had originally been recorded based on statutory rates, were extinguished. | ||||||||||||||||
[2] | December 31, 2013 December 31, 2012 December 31, 2011Components of Revenue License Fees28,422 28,308 43,709Service Revenue96,874 127,904 162,487Net Revenue125,296 156,212 206,196 | ||||||||||||||||
[3] | December 31, 2012 December 31, 2011 December 31, 2010Components of Cost of Revenue License Fees6,381 8,012 8,538Service Revenue63,916 68,369 70,553Net Revenue Costs70,297 76,381 79,091 |
Segment Information (Revenue by
Segment Information (Revenue by Geographic Region) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | [1] | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | [1] | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||||
Revenue | $ 29,922 | $ 30,823 | $ 33,954 | $ 30,597 | $ 35,506 | $ 34,157 | $ 40,825 | $ 45,724 | $ 125,296 | [2] | $ 156,212 | [2] | $ 206,196 | [2] | ||
United States | ||||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||||
Revenue | 46,893 | 61,660 | 90,250 | |||||||||||||
Europe | ||||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||||
Revenue | 15,166 | 26,575 | 38,155 | |||||||||||||
Republic of Korea | ||||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||||
Revenue | 37,832 | 39,852 | 46,601 | |||||||||||||
Rest of World | ||||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||||
Revenue | $ 25,405 | $ 28,125 | $ 31,190 | |||||||||||||
[1] | In the quarter ended March 31, 2014, certain accrued royalty liabilities of $10.6 million associated with our historical music business, which had originally been recorded based on statutory rates, were extinguished. | |||||||||||||||
[2] | December 31, 2013 December 31, 2012 December 31, 2011Components of Revenue License Fees28,422 28,308 43,709Service Revenue96,874 127,904 162,487Net Revenue125,296 156,212 206,196 |
Segment Information (Long-Lived
Segment Information (Long-Lived Assets by Geographic Region) (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | $ 24,016 | $ 43,712 | $ 53,641 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | 16,821 | 33,421 | 40,347 |
Europe | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | 4,898 | 6,696 | 8,280 |
Republic of Korea | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | 282 | 547 | 936 |
Rest of World | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | $ 2,015 | $ 3,048 | $ 4,078 |
Related Party Transactions (Add
Related Party Transactions (Additional Information) (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2013USD ($) | |
Rhapsody America LLC | |
Related Party Transaction [Line Items] | |
Revenue from related party | $ 0.5 |
Quarterly Information (Unaudi82
Quarterly Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | [1] | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | [1] | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||
Net revenue | $ 29,922 | $ 30,823 | $ 33,954 | $ 30,597 | $ 35,506 | $ 34,157 | $ 40,825 | $ 45,724 | $ 125,296 | [2] | $ 156,212 | [2] | $ 206,196 | [2] | ||||||||
Gross profit | 14,094 | 12,733 | 14,122 | 14,050 | 17,625 | 15,229 | 20,039 | 37,518 | 54,999 | 90,411 | 127,105 | |||||||||||
Operating (loss) income | (7,506) | (21,962) | (20,707) | (19,012) | (20,682) | (20,763) | (18,832) | (8,876) | (69,187) | (69,153) | (70,808) | |||||||||||
Net income (loss) | $ (8,413) | $ (21,184) | $ (27,781) | $ (24,469) | $ (20,838) | $ (22,178) | $ (21,029) | $ (7,770) | $ (81,847) | $ (71,815) | $ (58,990) | |||||||||||
Basic net income (loss) (in dollars per share) | $ (0.23) | [3] | $ (0.59) | [3] | $ (0.77) | [3] | $ (0.68) | [3] | $ (0.58) | [3] | $ (0.62) | [3] | $ (0.59) | [3] | $ (0.22) | [3] | $ (2.26) | [3] | $ (2) | [3] | $ (1.66) | |
Diluted net income (loss) (in dollars per share) | $ (0.23) | [3] | $ (0.59) | [3] | $ (0.77) | [3] | $ (0.68) | [3] | $ (0.58) | [3] | $ (0.62) | [3] | $ (0.59) | [3] | $ (0.22) | [3] | $ (2.26) | [3] | $ (2) | [3] | $ (1.66) | |
Extinguishment of liability | $ 0 | $ 10,580 | $ 0 | |||||||||||||||||||
[1] | In the quarter ended March 31, 2014, certain accrued royalty liabilities of $10.6 million associated with our historical music business, which had originally been recorded based on statutory rates, were extinguished. | |||||||||||||||||||||
[2] | December 31, 2013 December 31, 2012 December 31, 2011Components of Revenue License Fees28,422 28,308 43,709Service Revenue96,874 127,904 162,487Net Revenue125,296 156,212 206,196 | |||||||||||||||||||||
[3] | The sum of the quarterly net income per share amounts will not necessarily equal net income per share for the year due to the use of weighted average quarterly shares and the effects of rounding. |