Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2017

4. Goodwill and Intangible Assets

The following table presents the changes in our goodwill balance (in thousands):


Balance at December 31, 2016	$	11,167
Acquisitions		5,782
Foreign currency impact		46
Balance at June 30, 2017	$	16,995

We recorded $5.8 million of goodwill in connection with the acquisition of Deny Designs in May 2017. Refer to Note 11 for additional information.

Intangible assets consisted of the following (in thousands):


	June 30, 2017
	Gross carrying		Accumulated		Net carrying
	amount		amortization		amount
Customer relationships	$	3,053	$	(1,453)	$	1,600
Artist relationships		12,227		(10,477)		1,750
Media content		91,666		(89,499)		2,167
Technology		6,254		(4,168)		2,086
Non-compete agreements		25		(16)		9
Trade names		9,918		(4,482)		5,436
	$	123,143	$	(110,095)	$	13,048


	December 31, 2016
	Gross carrying		Accumulated		Net carrying
	amount		amortization		amount
Customer relationships	$	1,453	$	(1,252)	$	201
Artist relationships		11,916		(10,337)		1,579
Media content		91,616		(87,604)		4,012
Technology		5,654		(3,649)		2,005
Non-compete agreements		25		(11)		14
Trade names		7,539		(4,077)		3,462
	$	118,203	$	(106,930)	$	11,273

Identifiable finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives commencing on the date that the asset is available for its intended use.

Total amortization expense for the periods shown below includes (in thousands):


	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Service costs	$	755	$	1,786	$	2,058	$	3,486
Sales and marketing		196		948		339		1,897
Product development		268		246		515		493
General and administrative		177		134		321		270
Total amortization	$	1,396	$	3,114	$	3,233	$	6,146

Service costs include accelerated amortization charges of $0.1 million and $0.4 million for the three months ended June 30, 2017 and 2016, respectively, and $0.6 million and $0.5 million for the six months ended June 30, 2017 and 2016, respectively, as a result of removing certain assets from service.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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