As encouraging as the smartphone maker’s surprise fourth-quarter profit might be, it’s clear the company faces some still-formidable challenges — particularly in shoring up its eroding subscriber base.

BlackBerry lost another three million subscribers in its latest quarter, with its customer base falling to 76 million subscribers. Until the third quarter, BlackBerry had posted subscriber increases fairly consistently. So the fact that it just posted a second consecutive decline — and one that was larger than expected — is cause for concern indeed.

Returning BlackBerry to its former glory is already a daunting task; pulling that off while subscriber numbers are declining only makes it more so. Obviously, BlackBerry subscribers are the most likely buyers of the company’s new BlackBerry 10 handsets, so an accelerating decline in their membership is troubling.

“The subscriber decline is actually slightly worse than it seems since it includes BlackBerry 10 subs that do not generate service revenue,” Raymond James analyst Tavis McCourt told AllThingsD. “BlackBerry is losing subscribers at a more rapid rate in emerging markets, which up until a year ago was still a source of rapid growth. That’s concerning as well.”

Morgan Stanley analyst Ehud Gelblum took a more pragmatic view of the decline, suggesting it was inevitable and, perhaps, not quite so worrisome.

“We’ve all known that sub number was going to start coming down,” Gelblum said. “The positive part that we only know now is that the subs they’re losing are mostly low-end prepaid subs who weren’t contributing much to the service revenue line and probably weren’t likely candidates to buy a Z10 in the first place.”

Appearing on CNBC on Thursday, BlackBerry CEO Thorsten Heins downplayed recent declines in subscriber numbers, saying that services revenue per subscriber is the more important metric and the one that the company is striving to increase.

“The decline in the subscriber numbers is really associated [with] the former BlackBerry OS system, so we expect this to gradually continue with [a] single digit [drop], probably, in the next quarter,” Heins said. “What we’re really working on, and what we’re looking toward, is new services based on BlackBerry 10, and then we will be looking at the monetary value of those services, rather than pure subscriber numbers.”

In other words, this is all part of BlackBerry’s transition to its new platform.

A fair point, I suppose, though it would certainly be more reassuring if the number of departures weren’t quite so large. Down three million subs in a single quarter is sharp erosion and doesn’t bode well for a company that’s struggling to reverse its market-share loss. That’s a number that is very clearly going in the wrong direction, and BlackBerry really needs to execute in the next quarter to stanch the bleeding.

Together, the two will be rebranded as nCrowd, and will be headquartered out of Atlanta. 

There are two remarkable aspects to this transaction, even though nCrowd will still only be a fraction of the size of Groupon or LivingSocial.

First is that the two companies represent a total of 19 acquisitions combined, representing a significant percentage of the overall number of deals that have taken place in the U.S. Second is that this deal was able to get done at all, given the current state of the industry.

Over the past year, Groupon has become a clear winner in the space, despite thousands of startups trying to challenge it. Groupon’s staying power, in part, proves that while the coupon business was easy to replicate, it isn’t easy to scale. And even at Groupon’s scale, it still struggles.

Thus, finding a buyer has become increasingly difficult for those that remain in business.

For instance, in 2011, 63 daily deal companies were acquired, but last year, that number dropped to 28, according to 451 Research, which tracks mergers and acquisitions in the space. So far this year, only one deal has closed (that was for Totsy buying the assets of Mamasource).

The last notable deal was when Chase Bank purchased San Francisco-based Bloomspot for $35 million in December.

Even with the acquisition of CrowdSavings by Half Off Depot, the combined entity will still have a minuscule footprint. All told, nCrowd will have two million registered users who are signed up to receive daily emails in 17 markets. The company employs 70 people, who serve locations that are mostly in the South and Midwest, including Atlanta, Tampa, Jacksonville and Kansas City.

Half Off Depot bought CrowdSavings for about 6.5 million shares and about $1.5 million in cash, according to sources familiar with the transaction.

“We compete with Groupon, but we used to compete with 600 daily deals sites. There aren’t that many left anymore compared to how it used to be,” said Brian Conley, CEO of nCrowd (previously of Half Off Depot).

Conley said the four-year-old company has been able to stay afloat by expanding beyond daily deals to social commerce, which means assisting merchants with running Facebook contests and helping them to improve customer retention.

I first talked to Chad Jaquays, CEO of Crowdsavings.com, a year and a half ago, when his company was considered the most active acquirer in the daily deals space — in fact, it was so acquisitive that he built a page on the company’s website announcing, “We Buy Deal Sites.”

Many of the deals were tiny, costing Jaquays roughly $100,000 to $400,000 apiece. He was interested in acquiring more subscribers, but he also took other factors into consideration, like how many of those subscribers had purchased a deal before. In all, he purchased 15 companies, and now he’s found someone interested in buying his own.

The next logical question is, what’s the end goal? Will nCrowd ever get to Groupon’s scale?

Conley isn’t disillusioned.

“Who knows what the future holds,” he said. “I will make no prognostications as to whether we can beat the fastest-growing company ever. But we do feel like we have a unique value proposition for the merchants. Once it is well-understood, this thing could take off.”

On Monday, MetroPCS released its latest subscriber reports, and they are, in a word, abysmal. For its fourth quarter, the company posted a net loss of 93,237 wireless subscribers. And that gruesome number brought total subscriber losses for 2012 to around 459,936. MetroPCS ended the year with about 8.9 million subscribers. Quite a change from 2011, which ended with 9.4 million.

MetroPCS’s subscriber results were well below the Street’s expectations, and the company’s stock is being hammered as a result. Shares are down around 2 percent as I write this.

“This is the first time MetroPCS has lost subscribers on a net basis in Q4, which is typically its second strongest quarter behind Q1, and marks the company’s third consecutive quarter of net subscriber losses,” UBS analyst John Hodulik said in a research note. “We believe this underscores the urgency with which the company pursued merger partners before reaching a deal with T-Mobile in October.”

Reporting third-quarter earnings Thursday morning, Sprint said it lost $767 million, or 26 cents a share, compared with a loss of $301 million, or 10 cents a share, a year earlier. While that’s better than the deeper loss of 42 cents a share analysts had forecast, it’s ugly just the same. Net operating revenue for the period was $8.76 billion, an improvement over the $8.33 billion Sprint managed during the third quarter last year. Analysts had been looking for revenue of around $8.8 billion.

And Sprint continues to lose subscribers. The carrier today said it suffered a net customer decline of 456,000 in the third quarter. That’s worse than the loss of 361,000 analysts had expected, and far worse than the loss of 246,000 customers it posted in the year-earlier period. That said, Sprint did add 410,000 net postpaid customers in the quarter. So a bit of good news there.

The company sold 1.5 million iPhones during the quarter. That’s nowhere near the 4.7 million sold by AT&T and 3.1 million sold by Verizon during their third quarters. But, according to Sprint CEO Dan Hesse, it’s enough to keep the carrier on track to satisfy its $15.5 billion purchase agreement with Apple.

At $5.59, Sprint shares are down .62 percent in early trading.

The reason? A rare bit of good news in an otherwise bleak landscape of tablet disappointments, missed BlackBerry 10 deadlines, leadership shake-ups and layoffs.

During his BlackBerry Jam Americas keynote, RIM CEO Thorsten Heins said the company managed to add about two million subscribers to its BlackBerry service in its most recent quarter. It had about 78 million when it reported fiscal first-quarter earnings in late June. Now it has some 80 million.

And that’s great news for investors who had begun to fear that RIM’s subscriber additions are leveling out and might even decline for the first time this quarter. The caveat here is that these additions are probably occurring in emerging markets, one of RIM’s few growth areas. And they’re being driven by some pretty aggressive subsidies, which may cause the average selling price for BlackBerrys to drop. The BlackBerry’s ASP hasn’t exactly been stable recently, so further volatility is a danger.

RIM will report second-quarter earnings on Thursday after market close. Analysts are expecting a loss of 45 cents a share, the company’s third consecutive loss.

The company has more than 530,000 paying subscribers for its digital editions, and it credits the plan with a consistent increase in circulation dollars. Which it needs, because its ad dollars continue to shrink.

Here’s another data point in favor of the plan: A report from Barclays analyst Kannan Venkateshwar, who estimates that the paper will have more digital subscribers than print subs within a couple of years.

The caveats: Even if Venkateshwar’s projections are right, the digital subscription story won’t solve all of the Times’ problems. For starters, each digital customer generates much less revenue than a print customer: The digital sub pays around $220 a year for the Times, versus approximately $730 for the paper-and-ink version.

And while the profits that each kind of sub generates for the paper should be roughly equal — because it’s a whole lot cheaper to produce and deliver a digital copy than a print one — that only holds true if the Times isn’t overly reliant on discounts to sell its digital subscriptions.

Still, Venkateshwar, who has been bullish on the Times for a while, argues that most of the digital subscribers to date seem to be new customers. So all of this is incremental revenue. That’s a best-case scenario for the paper.

Time Warner Cable, the second-largest U.S. cable television provider behind Comcast Corp., has struggled alongside other cable providers against television networks as disputes over programming costs have caused rounds of blackouts for consumers. Cable providers claim the programmer’s fee increases are excessive and lead to higher prices for customers, while networks maintain they are only asking for a fair deal.

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The acquisition being announced today on the company’s blog is Llustre, a U.K. copycat of Fab that is identically focused on selling home decor, apparel and other items from independent designers. Terms of the deal were not disclosed.

Fab previously purchased Casacanda in Germany and FashionStake in the U.S. to launch a clothing vertical.

Given that Fab has only been around for a year and has seen such significant growth, it appears to have identified just what consumers want: Hard-to-find, quirky and stylish products, gadgets and clothing that are not easily found in Target, Walmart or even on Amazon.com.

The inventory may be shallow, but the product types are vast. Yesterday, the site was selling earphones shaped like bullets, vintage-looking vases, toilet seats that function as bidets and motion-activated cameras for the outdoors. In other words, it’s a hipster’s paradise.

It took Fab four months to hit one million subscribers, six months to hit 1.5 million and 12 months to hit 4.75 million. Fab has not been shy about its successes over the past year, and has raised lots of capital along the way, including a $40 million round in December from Andreessen Horowitz and others.

Now, Fab is claiming it is entering Europe in a serious way, and expects the region to contribute about 20 percent of the New York-based company’s sales this year. Fab is now shipping to 20 countries; it has 360 employees in five offices, including New York, Berlin and London.

Llustre has also moved quickly since launching only two months ago. Founded by Tracy Doree and Vivienne Bearman, it has 25 employees, works with more than 500 designers; membership and orders have tripled in the past five weeks to some unknown quantity.

Starting today, Llustre will become Fab UK. Doree and Bearman will remain on board, heading merchandising and product and operations, respectively.

The Philadelphia-based company continued to shed video subscribers but said the rate of subscriber defections slowed for the sixth consecutive quarter to 37,000, a 5 percent improvement.

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Shares of the New York-based company gained $6 to close at $27.06 today after Reuters reported that the company was in the process of hiring a financial adviser after it received takeover interest from private equity firms.

Travelzoo spokeswoman Lisa Moore declined to comment on whether the company was for sale.

Travelzoo is one of the pioneers in the daily deals business. For more than a decade, it has been sending subscribers a weekly email highlighting what it calls the top 20 travel deals.

A list of obvious acquirers for Travelzoo includes Google, which famously failed to buy Groupon for $6 billion. More recently, Google bought travel company ITA Software. Amazon could also be interested as it pushes AmazonLocal, its daily deals business; however, it already owns a percentage of LivingSocial, the second-largest deals company after Groupon.

A host of other companies could also take a look at the deal, including its travel competitors, such as Expedia or Priceline, or several international providers.

Unlike Groupon, which takes a cut of the revenue when a deal is sold, Travelzoo uses an advertising model where companies pay a fee to get in front of its large email audience. More recently, the company shifted gears to enter the local deals space, offering discounts on restaurants and other local services. In those deals, it charges the merchant a percentage of each transaction.

Today, the company’s market value hovers around $300 million, falling way short of Groupon’s $9 billion valuation and making it a prime acquisition target.

The company’s main assets are its sales team and its list of subscribers, but generally, it is not known as a technology leader. The company’s Web site is still fairly basic with a red, white and blue theme and has very few pictures, which the company says is on purpose. Before any acquisition closes, the potential acquirer would want to know how much the two companies’ subscriber bases overlapped.

In 2011, the company reported revenues of $148 million, up from $112 million over the same period during the previous year.

That’s not a big surprise, given it was essentially giving away cash — each $10 gift card cost five bucks!

But it’s a big deal for AmazonLocal, the company’s nine-month-old daily deals business that’s playing catch-up against others, like Groupon, LivingSocial, Travelzoo and Google.

According to Savvr, which tracks deal information from 260 publishers, Amazon’s promotion may have been one of the fastest-selling deals since the industry took off in 2008.

Previously, it took LivingSocial only 14 hours to sell one million gift cards for Whole Foods. (Amazon entered the daily deals business through a strategic investment in LivingSocial.)

For Amazon, yesterday’s deal by far and away was its most successful in terms of deals sold as well as revenue generated. Previously, Savvr said Amazon’s highest revenue-generating deal was for Omaha Steaks, which put $806,800 in top-line revenue. Meanwhile, the most vouchers it had ever sold was 27,135.

These high-profile deals in the space are used to introduce the service to new users and sign up more subscribers, even though they tend to lose money.

In a blog post, Savvr’s co-founder Tim Elliot explains that Amazon’s decision to sell discounted gift cards was a smart move because it roughly costs about $5 to acquire each new subscriber through traditional channels, anyway.

“Amazon not only paid that amount, but they also acquired substantially more valuable subscribers: Customers who are known to make purchases online, and now these customers can place 1-click orders as well,” he wrote.

Not to mention, all of those who bought the gift card will turn around and spend it on Amazon.com.

In a statement, an Amazon spokesperson confirmed the deal sold out after one million vouchers.

“The $10 Amazon.com Gift Card deal offered by AmazonLocal on Tuesday sold out in just over 17 hours at 5:11 p.m. PDT. The deal went live at midnight PDT and was available to customers across the U.S. The popularity of this AmazonLocal deal shows that customers want unique and relevant deals that provide them with an excellent buying experience.”

A good reminder of that comes from today’s Comcast earnings report, where the cable giant notes that its NBC broadcast unit posted a $305 million bump in licensing fees last year, “primarily the result of a licensing agreement for prior season and library content.”

Comcast doesn’t identify which agreement that was, but people familiar with the company say it was the “multi-year” renewal agreement that Netflix and NBC Universal announced last July. That deal gives Netflix subs access to shows like “The Office” and “Parenthood.”

Comcast generated $55.8 billion in revenue last year, so that $300 million barely qualifies as a drop in a bucket. But it is a profitable drop, since licensing revenue is basically found money with big fat margins.

And given that woeful NBC saw revenue drop 7.1 percent last year to $6.4 billion,* that money is nice to have.

Meanwhile, a quick check on Comcast’s cable business: It lost 17,000 video subscribers in the last quarter, which Comcast executives say is a great result, because it’s the lowest quarterly drop they’ve had in five years. And the company added 336,000 broadband customers.

*Some of that drop is because the network saw a boost from the Olympics in 2010.

Rather than focusing on extreme discounts, the San Francisco company has decided to offer extreme adventures.

Today, it is launching Zozi Guru, which sells high-end adventures taught and organized by professional athletes.

For example, you can go skiing with Olympic gold-medal skier Jonny Moseley, or go running with barefoot runner Eric Orton, or learn to kayak with Tao Berman, a three-time world-record holder for extreme whitewater kayaking.

Unlike typical daily deals, these offers are full price, and the merchants and celebrities involved will surely make money, which is in steep contrast to lots of sites that blast emails out to a list of subscribers on a daily basis.

“We don’t want to be a deals site. You won’t hear us use the word ‘deal.’ It’s all about experiences. We try to offer the best prices, but it’s about the adventure and exploration component,” said TJ Sassani, Zozi’s CEO and founder.

That hasn’t always been the case for Zozi.

It started off as a daily deals site, selling international trips in 2008. But Sassani said the opportunity wasn’t as big as the company had hoped, and Zozi shifted to local adventures. Intially, it used the Groupon model to grow membership, but now that it has some scale, it is shifting to full price.

Typical offers on the site range from bungee-jumping sessions to kiteboarding lessons, but Sassani said the business won’t ever reach Groupon’s scale. He said he definitely doesn’t aspire to have an initial public offering; however, he does believe that it could be a $1 billion to $2 billion opportunity.

So far, Zozi has signed up close to one million subscribers and is in 20 cities, up from only one market in 2010. It has just started moving into Canada, and other locations are coming soon.

“Groupon is much more like Wal-Mart, where they offer low-cost, low-quality items to discount seekers,” Sassani said. “But our average purchase price ($60) is more than double Groupon’s, and we target someone who would shop at REI. It’s a sophisticated customer, who is less price-sensitive.”

To help with the rollout of Zozi Guru, the company raised a small undisclosed inside round with investors last week. Previously, it had raised $10 million from Dave McClure’s 500 Startups, Launch Capital, ZIG Capital and others.

This week, Zozi is launching the new service with six celebrity athletes, but Sassani said the company has signed deals with 20 to 30 people, who will do a combination of 100 programs over the next year.

Sticking with its goal of offering premium experiences, the programs start at $1,000, and can go as high as $10,000, depending on the celebrity’s status and the event, which could include luxurious accommodations — one example might be a five-night visit to Hawaii, where you would learn how to surf from a professional, and stay at the Four Seasons.

The deal will also give Comcast customers more ways to watch those shows, including the ability to stream some of the programs live, on the go, on laptops, iPhones and iPads.

I’ve published the full press release below, but here are some of the quick takeaways:

THE WALT DISNEY COMPANY AND COMCAST CORPORATION ANNOUNCE A LONG-TERM, COMPREHENSIVE DISTRIBUTION AGREEMENT THAT ADVANCES THE SUCCESSFUL MULTICHANNEL BUSINESS MODEL

DEAL PROVIDES XFINITY TV CUSTOMERS BROAD ACCESS TO TOP SPORTS, NEWS AND ENTERTAINMENT CONTENT ACROSS MULTIPLE SCREENS IN AND OUT OF THE HOME

PHILADELPHIA AND BURBANK –– JANUARY 4, 2012 –– Comcast Corporation (Nasdaq: CMCSA, CMCSK) and The Walt Disney Company (NYSE: DIS) today announced a long-term, comprehensive distribution agreement that will deliver Disney’s top quality sports, news and entertainment content to Comcast’s Xfinity TV customers into the next decade on television, online, on tablets and handheld devices. The new agreement enhances the multichannel business model and supports the companies’ mutual goal to deliver the best video content to customers across multiple platforms using the latest technology and cloud innovation. For the first time ever, Comcast’s Xfinity TV customers will be able to watch ESPN, ABC or Disney shows live or on demand and across multiple screens. The companies also agreed to collaborate over the term of the deal to create new, innovative viewing experiences for Xfinity TV customers.

The networks and services covered by the agreement include: ABC, ABC Family, Disney Channel, Disney XD, ESPN, ESPN2, ESPNU, ESPN Deportes, ESPNEWS, ESPN Classic, ESPN Goal Line, ESPN Buzzer Beater, ESPN 3D, ESPN GamePlan, ESPN FullCourt and ESPN3; retransmission consent for seven ABC-owned broadcast television stations (WABC-TV New York, WLS-TV Chicago, WPVI-TV Philadelphia, KGO-TV San Francisco, KTRK-TV Houston, KTVD-TV Raleigh-Durham, and KFSN-TV Fresno) as well as more than 10 high-definition networks. Additionally, Comcast will launch Disney Junior, a new 24-hour basic channel for preschool-age children, parents and caregivers. Comcast will also provide its Xfinity TV customers with broad access to a suite of live Disney networks on an authenticated basis and expanded Xfinity On Demand content through Disney’s comprehensive TV+ initiative. In total, 70 services are covered by the broad scope of this new agreement. License fee schedules for different services under the deal will be phased in over time.

“Comcast was the first video provider to create technology that enabled us to deliver content to customers where and when they want it across any viewing experience,” said Neil Smit, President and Chief Executive Officer, Comcast Cable. “We are very pleased to have reached this unprecedented and innovative, long-term agreement with Disney which embraces the future of entertainment and allows Comcast to continue to bring our vision of TV Everywhere to Xfinity customers whether at home or on the go.”

Anne Sweeney, Co-Chairman, Disney Media Networks and President, Disney/ABC Television Group, added, “This landmark deal is a great example of what can be achieved when programmers and distributors collaborate and innovate together to meet the ever-evolving needs of consumers and enhance the viewing experience. By combining the best news, sports and entertainment content available today with cutting-edge technologies, we’re able to fully realize our comprehensive TV+ initiative, and introduce a brand new suite of authenticated services to Comcast subscribers.”

Added George Bodenheimer, Executive Chairman, ESPN, Inc., “Given the scope of assets Comcast and Disney/ABC/ESPN are making available to consumers, this agreement is unprecedented in our industry. It reinforces the value of the multichannel subscription and takes full advantage of new technologies, which serve all of our viewers.”

The extensive and expanded rights package for Comcast’s Xfinity TV customers includes rights across multiple platforms for:

· Comcast’s Xfinity TV customers will receive more ABC, ABC Family, Disney and ESPN content through their set-top-box and, at this time, Disney and ESPN content online, including:

o ABC On Demand, ABC’s fast-forward-disabled On Demand service, which currently features a selection of top-rated primetime entertainment programming, including episodes of such popular current ABC shows as “Castle,” “Grey’s Anatomy,” “Once Upon A Time,” “Private Practice” and “Revenge.” Full current seasons will be made available on a number of shows. Additionally, Xfinity TV customers will have access to a variety of ABC News programming as well as some local ABC owned-station content.

o ABC Family On Demand, which features a variety of top-rated full episodes, refreshed monthly, from such popular millennial favorites as “The Secret Life of the American Teenager,” “Switched at Birth,” and “Melissa & Joey.” Full current seasons will be made available on a number of shows. ABC Family original movies like “12 Dates of Christmas” will also be available.
o Disney-branded On Demand offerings, including Disney Channel On Demand, Disney Junior On Demand, and Disney XD On Demand. Refreshed each month, the Disney Channel On Demand offering will include episodes from such series as “Handy Manny,” “Mickey Mouse Clubhouse,” and “Jake and the Never Land Pirates” for preschoolers, as well as variety of episodes from “A.N.T. Farm,” “Good Luck Charlie,” “Wizards of Waverly Place,” and other popular series for older kids. Select episodes featured on Disney Channel On Demand will be available in innovative new offerings, such as playlists and monthly programming blocks, in addition to a number of episodes available in multiple languages. Disney Channel Original Movies such as “Lemonade Mouth,” “Geek Charming” and “Phineas and Ferb: Across the Second Dimension” will also be available. Disney XD On Demand features a variety of episodes from such series as the Emmy Award-winning animated hit “Phineas and Ferb.”
o Disney Channel’s subscription Video On Demand service, which offers on demand access to select episodes before they air, will now be available to Xfinity TV customers who receive Disney Channel, a service that Comcast will offer to these customers for no additional fee.
o Expanded on demand content from ESPN, including content from ESPN Deportes and ESPN’s award-winning original content from ESPN Films.
o The subscription On Demand service “Disney Family Movies,” which features a selection of classic and contemporary feature films and animated shorts from The Walt Disney Studios.
Xfinity TV customers will receive broad access to existing authenticated products like WatchESPN, as well as upcoming authenticated products, including WatchDisneyChannel, WatchDisneyXD and WatchDisneyJunior. These services will give Comcast’s Xfinity TV customers more opportunities to access live and video on demand content, both in-home and out-of-home, on their computers, smartphones, tablets and gaming consoles.
Xfinity TV customers will also receive the recently announced Disney Junior, a new 24-hour basic channel for children ages 2-7, parents and caregivers. Upon its debut in 2012, the new channel will feature animated and live action programming that blends Disney’s unparalleled storytelling and beloved characters with learning, including early math, language skills, healthy eating and lifestyles, and social skills.
Comcast also obtained rights to air certain content from ESPN3, ESPN FullCourt and ESPN GamePlan on Comcast’s Xfinity Sports Entertainment Package.

Shares rose 4 percent to $9.95 after hours on the stronger-than-expected results. The stock had climbed 11 percent this year through the close.

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New research was released today by Forrester on Groupon’s second day of trading on the public markets. In midday trading, the daily deals giant was down 17 cents, or less than a percentage point, to $25.94.

In the report, Forrester’s biggest dig on the space is that it has created “deal-hunting gremlins,” who are getting a discount on services they would normally be willing to pay full price for. Additionally, analyst Sucharita Mulpuru finds that the daily email model is expensive to scale and that consumers will ultimately unsubscribe as offers fill up their inboxes.

Other findings:

• 29 percent of subscribers of coupon and flash sales sites have unsubscribed because they don’t want to receive so many emails
• 49 percent don’t sign up because they don’t want to receive more email
• 83 percent receive emails from Groupon
• 41 percent receive emails from LivingSocial
• 26 percent of subscribers have purchased more than four offers.
• 36 percent have never made a purchase.

The survey was conducted from June 11 to 21 and had a total of 9,449 respondents.

(Image courtesy of Groupon’s Flickr page.)

The largest U.S. cable operator and its peers have struggled with stalling industry-wide growth in pay-TV subscribers as consumers cut back on services and the weak housing market means fewer people signing up for services when they move into a new place. Comcast, though, has improved its TV customer retention of late while also accelerating growth in broadband subscribers.

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The daily deals giant cut back on marketing expenses and still showed it could make a profit in North America, plus it delivered on a number of other key metrics.

Marketing costs are the primary way Groupon gets subscribers to sign up for its email list that offers a deal every day and therefore is the lifeblood of its growth engine.

But it is also costly and unsustainable.

In today’s filing with the SEC, it showed it could continue to grow despite reducing its marketing expenses by 20.4 percent during the quarter in the U.S. alone.

Here are some key takeaways from the quarter as compared to the prior quarter on a worldwide basis:

• Revenues before the merchant’s cut: $1.16 billion vs. $929 million
• Subscribers: 142.9 million vs. 115.7 million
• Paying Customers: 29.5 million vs. 23 million
• Participating merchants: 78,649 vs. 78,466
• Groupons sold: 33 million vs. 32.5 million
• Average revenue per subscriber: $3.30 vs. $3.90
• Average revenue per Groupon sold: $13 vs. $12.1
• Groupons sold per paying customer since 2009: 4.2 vs. 4
• Total unique paying customers: 16 million vs. 12.1 million

Wireless carriers have agreed to send warnings to consumers in danger of exceeding their monthly subscriber minutes or data plans under a deal with the Federal Communications Commission. The companies will provide the alerts to consumers within 12 to 18 months, FCC officials said.

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The investment round values two-year-old One Kings Lane at $440 million, said Chief Executive Doug Mack. The San Francisco start-up, which is unprofitable, is on track to bring in more than $100 million in revenue this year, he said.

One Kings Lane sends its more than two million subscribers emails and other notifications offering discounts of about 50 percent on designer furniture and other home goods. The discounts are available on the site for just 72 hours. Unlike traditional e-commerce sites that serve shoppers on the hunt for something, flash sites appeal to serendipity.

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The music service is designed to work with RIM’s BlackBerry Messenger, the company’s proprietary instant-message system, according to people who have discussed it with RIM executives. These people said that BBM Music, as the service is to be known, could launch as soon as next week.

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Already, this year it has doubled its subscriber base to 115 million, up from 50.58 million at the end of December.

But has the daily deals company been good at getting people to buy?

For the first time, Groupon has provided some insight into that question as part of its second-quarter results released today in its amended S-1 filing, which also deemphasized a controversial accounting method that subtracted its marketing costs from the bottom line.

Here’s the deal:

• Groupon had 115.7 million subscribers at the end of June.
• Of those subscribers, only about 20 percent — or 23 million — have ever made a purchase. Those are called cumulative customers.
• The average subscriber (not customer) spent $18 in the first half of the year, down from $21 last year.
• The average customer over the lifetime of a membership has purchased four Groupons, up from three a year ago.
• The average revenue per Groupon sold in the first half of the year was $25, up from $23 in the same period 2010.
• The number of merchants Groupon worked with in the first half of 2011 increased to 135,247, up from only 12,468 in the first half of 2010.

Converting subscribers into customers will be key for Groupon in order to justify its high marketing costs.

But with only two and a half years of operating results, it’s difficult to ascertain if things are headed in the right direction. Not to mention that the averages easily get weighed down by the massive numbers of subscribers who are signing up.

For instance, the average revenue per subscriber fell by $3 year over year, which may sound bad, but at the same time, the number of subscribers skyrocketed by 1,007 percent.

It’s also hard to draw any conclusions about the number of subscribers Groupon has been able to convert into paying customers.

For example, as of the first half of the year, 20 percent of subscribers had ever paid for a Groupon, down from 22 percent for the first six months of 2010. For the full year 2010, the number was even lower, when only 17 percent of Groupon’s 50.6 million subscribers were considered paying customers.

Groupon just rolled out a promotion today that could get these numbers really moving by the end of the month. If a subscriber buys any two Groupons by August 31, the company will give him or her $10 to spend on an offer in the future.

So much money, in fact, that it wanted to exclude those costs from its financial results — by some calculations — in order to downplay the impact to its bottom line.

However, due to regulatory pressure, Groupon is expected to amend its S-1 document to remove those figures from its next filing, coming as soon as this week, according to an exclusive report by AllThingsD’s Kara Swisher.

Setting the controversy aside for a moment, however, it appears that, while expensive, those marketing efforts have done a good job of getting millions of users signed up for Groupon’s daily deal as quickly as possible.

Groupon has already doubled its subscribers to 115 million this year, up from 50.58 million at the end of last year, Reuters reports. That’s also up 38 percent from just five months ago, when it reported having 83.1 million subscribers at the end of the first quarter.

Groupon is now triple the size of LivingSocial,  its closest competitor at 40 million subscribers.

Groupon likely paid considerably for those users, if its marketing budget in the first and second quarters was anything like last year’s.

In 2010, Groupon reported that it lost $413.4 million using standard accounting practices. When it excludes some costs from its calculations — including online marketing expenses to attract new customers — it recorded a profit of $60.6 million in 2010.

Photo Credit: Groupon.

“We continue to believe it would be appropriate for us to increase our pricing to be able to continue investing in and delivering the best audio content in the world,” Karmazin said. “Early next year, for the first time since the merger, we will be able to price our service as we see fit.”

He offered no further details beyond that and said nothing about the size of the increase the company is mulling. But the company’s clearly aware it’s treading toward dangerous territory here. As CFO David Frear observed during the call, higher prices could result in subscriber attrition, something the company would prefer to avoid.

“Generally, when you raise prices you tend to dampen demand,” Frear said. “But I think you’ve heard us say that pretty clearly that overall, for this business, that we think that price increases make a lot of sense, given the programming we’re delivering and given how long we’ve left the price unchanged. It just makes a lot of sense to increase it in the future.”

I’m sure it does. With aggregate subscriber levels that exceeded 21 million this quarter, Sirius is by far the most popular music subscription service in the world (Spotify isn’t even a distant second with a self-reported 1.6 million). With the federally mandated freeze lifted, it’s time to milk it for all it’s worth.