Revenue | 5 . Revenue Adoption of Revenue from Contracts with Customers On December 31, 2017, the Company adopted the updated guidance on revenue from contracts with customers using the modified retrospective method applied to those contracts which were not completed as of December 31, 2017. Results for reporting periods beginning after December 31, 2017 are presented under the updated guidance, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historical revenue accounting. The Company recorded a net increase to opening retained earnings of $2,145 as of December 31, 2017 due to the cumulative impact of adopting the updated guidance, inclusive of a $3,501 decrease to deferred revenue, a decrease of $568 to prepaid expenses and other current assets and an increase to the deferred income tax liability of $788. Revenue Recognition Revenues are recognized when control of the promised services or goods is transferred to the Company’s customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those services or goods. The Company earns revenue from subscriptions for its digital products and by conducting workshops, for which it charges a fee, predominantly through commitment plans, prepayment plans or the “pay-as-you-go” arrangement. The Company also earns revenue by selling consumer products (including publications) in its workshops, online through its ecommerce platform and to its franchisees, collecting commissions from franchisees, collecting royalties related to licensing agreements, selling magazine subscriptions, publishing, selling advertising space on its websites and in copies of its publications and By Mail product sales. Commitment plan revenues, prepaid workshop fees and magazine subscription revenue are recorded to deferred revenue and amortized into revenue as control is transferred over the period earned since these performance obligations are satisfied over time. Digital Subscription Revenues, consisting of the fees associated with subscriptions for the Company’s Digital products, including its Personal Coaching + Digital product, are deferred and recognized on a straight-line basis as control is transferred over the subscription period. One-time Digital sign-up fees are considered immaterial in the context of the contract and the related revenue is recorded to deferred revenue and amortized into revenue over the commitment period. In the Studio + Digital business, the Company generally charges non-refundable registration and starter fees in exchange for access to the Company’s digital subscription products, an introductory information session and materials it provides to new members. Revenue from these registration and starter fees is considered immaterial in the context of the contract and is recorded to deferred revenue and a mortized into revenue over the commitment period. Revenue from “pay-as-you-go” workshop fees, consumer product sales and By Mail, commissions and royalties is recognized at the point in time control is transferred, which is when services are rendered, products are shipped to customers and title and risk of loss passes to the customers, and commissions and royalties are earned, respectively . Revenue from advertising in magazines and from magazine sales is recognized upon distribution of the magazine. For revenue transactions that involve multiple performance obligations, the amount of revenue recognized is determined using the relative fair value approach, which is generally based on each performance obligation’s stand-alone selling price. Discounts to customers, including free registration offers, are recorded as a deduction from gross revenue in the period such revenue was recognized. Revenue from advertising on its websites is recognized when the advertisement is viewed by the user. The Company grants refunds in aggregate amounts that historically have not been material. Because the period of payment of the refund generally approximates the period revenue was originally recognized, refunds are recorded as a reduction of revenue over the same period. The following table presents the Company’s revenues disaggregated by revenue source: Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Digital Subscription Revenues $ 153,940 $ 143,299 $ 459,764 $ 432,863 Studio + Digital Fees 144,101 168,664 458,771 551,499 Service Revenues, net $ 298,041 $ 311,963 $ 918,535 $ 984,362 Product sales and other, net 50,526 53,802 162,219 199,373 Revenues, net $ 348,567 $ 365,765 $ 1,080,754 $ 1,183,735 The following tables present the Company’s revenues disaggregated by revenue source and segment: Three Months Ended September 28, 2019 North Continental United America Europe Kingdom Other Total Digital Subscription Revenues $ 101,579 $ 42,230 $ 6,608 $ 3,523 $ 153,940 Studio + Digital Fees 108,338 20,644 10,733 4,386 144,101 Service Revenues, net $ 209,917 $ 62,874 $ 17,341 $ 7,909 $ 298,041 Product sales and other, net 33,767 8,264 5,592 2,903 50,526 Revenues, net $ 243,684 $ 71,138 $ 22,933 $ 10,812 $ 348,567 Three Months Ended September 29, 2018 North Continental United America Europe Kingdom Other Total Digital Subscription Revenues $ 95,664 $ 37,928 $ 6,282 $ 3,425 $ 143,299 Studio + Digital Fees 125,282 25,441 12,619 5,322 168,664 Service Revenues, net $ 220,946 $ 63,369 $ 18,901 $ 8,747 $ 311,963 Product sales and other, net 34,335 9,025 6,455 3,987 53,802 Revenues, net $ 255,281 $ 72,394 $ 25,356 $ 12,734 $ 365,765 Nine Months Ended September 28, 2019 North Continental United America Europe Kingdom Other Total Digital Subscription Revenues $ 303,190 $ 125,999 $ 20,019 $ 10,556 $ 459,764 Studio + Digital Fees 342,896 68,274 33,493 14,108 458,771 Service Revenues, net $ 646,086 $ 194,273 $ 53,512 $ 24,664 $ 918,535 Product sales and other, net 103,255 30,350 18,556 10,058 162,219 Revenues, net $ 749,341 $ 224,623 $ 72,068 $ 34,722 $ 1,080,754 Nine Months Ended September 29, 2018 North Continental United America Europe Kingdom Other Total Digital Subscription Revenues $ 289,002 $ 113,431 $ 19,800 $ 10,630 $ 432,863 Studio + Digital Fees 408,200 83,923 41,552 17,824 551,499 Service Revenues, net $ 697,202 $ 197,354 $ 61,352 $ 28,454 $ 984,362 Product sales and other, net 121,805 39,164 23,498 14,906 199,373 Revenues, net $ 819,007 $ 236,518 $ 84,850 $ 43,360 $ 1,183,735 Information about Contract Balances For Service Revenues, the Company typically collects payment in advance of providing services. Any amounts collected in advance of services being provided are recorded in deferred revenue. In the case where amounts are not collected, but the service has been provided and the revenue has been recognized, the amounts are recorded in accounts receivable. The opening and ending balances of the Company’s deferred revenues are as follows: Deferred Deferred Revenue Revenue-Long Term Balance as of December 29, 2018 $ 53,501 $ 961 Net increase (decrease) during the period 5,568 (717 ) Balance as of September 28, 2019 $ 59,069 $ 244 Revenue recognized from amounts included in current deferred revenue as of December 29, 2018 was $53,137 for the nine months ended September 28, 2019. The Company’s long-term deferred revenue, which is included in other liabilities on the Company’s consolidated balance sheet, had a balance of $244 at September 28, 2019 related to upfront payments received as an inducement for entering into certain sales-based royalty agreements with third party licensees. This revenue is amortized on a straight-line basis over the term of the applicable agreement. Practical Expedients and Exemptions The Company elected to apply the updated guidance only to contracts that were not completed as of December 31, 2017, the date of adoption. The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. The Company expenses sales commissions when incurred (amortization period would have been one year or less) and these expenses are recorded within selling, general and administrative expenses. The Company treats shipping and handling fees as fulfillment costs and not as a separate performance obligation, and as a result, any fees received from |