AOL Planning Move to Ad-Supported Model 161
garzpacho writes "In recognition of the fact that its subscriber-based revenues continue to plummet, AOL is planning to shift to an ad-supported business model. AOL's subscriber base, which peaked at 30 million users, now has less than 19 million subscribers and is still dropping — over 800,000 subscribers dropped the service in this year's first quarter alone. In addition to seeing fewer AOL CDs, a shift to ad revenue also means some serious cuts in staff size, especially in the customer service and retention departments. From the article: 'Time Warner plans to announce a series of changes at AOL that analysts say will mark the end of the company's paid-subscriber model. The company will begin relying on advertising sales rather than monthly fees paid by customers, according to the Wall Street Journal. 'I don't know whether advertising will work, but my thinking is (the changes) are basically an acceptance of what is happening,' says Joseph Bonner, a media and telecommunications analyst at Argus Research. 'This is a reflection of reality, that they have to find some other source of revenue.''"
What's the Draw? (Score:5, Insightful)
Re:What's the Draw? (Score:2)
Re:What's the Draw? (Score:4, Insightful)
What makes you think the Internet service itself would be free? As people started switching to broadband, AOL has become more of a "value added" thing you subscribe to on top of your Internet connection (they call it "bring your own access," IIRC).
Considering the failure of stuff like NetZero (which is now more like Net$10 instead), I would think AOL would know better than to try to support modem access for free -- but then again, they may actually be that stupid.
Re:What's the Draw? (Score:2)
My understanding of this whole transition is that part of dropping the "subscription model" includes getting rid of ISP operations, or drastically scaling them back. That's probably a lot of the staff they're thinking of firing; all the people that manage the dialup infrastructure and customer service / support.
The key here is that AOL doesn't want to be an ISP anymore. They want to be a content provider, not an access provider. Access is a
Re:What's the Draw? (Score:5, Insightful)
(1) People who don't know better (who, BTW, are excellent targets for ads for the same reason they know no better)
(2) People who don't want to let go of their email address.
Finally, as we see minority browsers get market share, especially Firefox (with its ease of customization and extendability), subscription web portals are becoming less and less useful -- moreso as the population becomes more facile with the internet and computers in general.
Re:What's the Draw? (Score:5, Funny)
Re:What's the Draw? (Score:4, Insightful)
Re:What's the Draw? (Score:2)
Re:What's the Draw? (Score:2, Interesting)
This is entirely untrue. Advertising has become increasingly common on AOL and is a factor in driving customers away. So it will have an effect, just not the effect they are hoping for.
Re:What's the Draw? (Score:1)
Re:What's the Draw? (Score:4, Funny)
Re:What's the Draw? (Score:2)
AOL was afraid of becoming the next Compuserve, so they're rushing headlong into becoming the next Prodigy. Way to go.
Re:What's the Draw? (Score:2)
You are so wrong.
AOL software is easier to use for newbies. And those is still many people who still don't own a computer.
Google does not cater to newbies to computers or ones who just don't have the time to learn how to use a computer well. Another reason Linux will never dominate OS market.
AOL software maybe bloatware but it's easy to use. And it gives windows users everything they need. I wish AOL would switch to Netscape browser though.
Re:What's the Draw? (Score:2)
That would require that each eyeball were worth at least the cost of broadband, and I know that isn't the case. Do you really think that users, on average, click on $30 (guestimated value of broadband) worth of ads per month? That is a LOT of ads. What is a clickthrough worth the
Is anyone paying full price right now? (Score:5, Interesting)
I know a lot of companies do this but most companies aren't a network of people that like nothing more than to sit around all day bs'ing on the web.
Re:Is anyone paying full price right now? (Score:2)
Nah. Most of those burned through all their VC, going bankrupt in the late 90s/early 2000s, all of which caused the stock market to tank.
Re:Is anyone paying full price right now? (Score:3, Interesting)
Re:Is anyone paying full price right now? (Score:2)
That's why I quit AOL (Score:4, Interesting)
Re:That's why I quit AOL (Score:2)
Re:That's why I quit AOL (Score:3, Interesting)
I'm suprised you actually could quit.
http://www.nbc10.com/news/9406462/detail.html [nbc10.com]
AOL: Alright, some day when you calmed down you're gonna realize that all I was trying to do was help you... and it was actually in your best interest to listen to me.
Fucking pathetic.
Fear. Lots of Fear. (Score:3, Interesting)
Re:Fear. Lots of Fear. (Score:3, Funny)
Re:Fear. Lots of Fear. (Score:1)
Re:Fear. Lots of Fear. (Score:2)
Of course, they tried to do this with Netscape (as their answer to NetZero) too,
AOL Is On Its Last Leg (Score:3, Insightful)
It's over AOL, the days of dialup are gone and people will eventually be using DSL or Cable provided by their locality. I for one am impressed that AOL even exists. I mean seriously, who uses AOL?
http://religiousfreaks.com/ [religiousfreaks.com]Re:AOL Is On Its Last Leg (Score:1)
Second Biggest Scourge (Score:2)
Wake me up... (Score:2)
Re:AOL Is On Its Last Leg (Score:3, Interesting)
Re: (Score:3, Insightful)
AOL is smarter than you think (Score:2)
Not to be cliche, but suckers use AOL, which ties in perfectly with advertising, as follows:
1) Create ISP/crappy web portal/email service.
2) Make sure you're substandard.
3) Advertise the heck out of your substandard service.
4) Compile a list of those suckers that signed up for your service despite better, cheaper alternatives, and make sure you have a way to get content in front of them (see 1, above).
5) Sell advertising space targeting your pre-filtered-for-susceptibility-
Re:AOL Is On Its Last Leg (Score:3, Interesting)
People like my sister and her friends. She knows pertty much nothing about a computer other than how to get AOL fired up so she can chat or check her email. For her AOL is great. For people like you and I it just gets in the way and as people learn more about computers, they have less reliance on services like AOL.
I'm surprised that AOL never had an internet appliance like WebTV from MS. My Dad has one of those and he loves it. Unfortunately the newer version is designed f
Re:AOL Is On Its Last Leg (Score:2)
Re:AOL Is On Its Last Leg (Score:2)
Re:AOL Is On Its Last Leg (Score:3, Insightful)
Well, I use it mainly because it is more than a 1/3 the price of DSL or Cable. I hate dail-up, but I can live with it rather than pay more than $60 for internet. I honestly think "broadband" internet shouldn't cost more than $10 a month, but I'll live with about $20 a month. 60*12=$720 a year 20*12=$240. $720-$240=
Re:AOL Is On Its Last Leg (Score:2, Insightful)
Re:AOL Is On Its Last Leg (Score:2)
Thi was when it was still $15/mo. They did force us to upgrade to the $17/mo higher speed package after our year was up, but it's still pretty affordable vs dialup. W
Re:AOL Is On Its Last Leg (Score:2)
Just imagine what I had to say about AOL, Windows, and etc.
I didn't get to post it before everything vanished into thin air.
In unrelated news... (Score:4, Funny)
Is this effective? (Score:2, Insightful)
Eight. Hundred. Thousand. (Score:1)
'Splain it to me, Lucy... (Score:3, Informative)
AOL doesn't exactly have a reputation for its great "content". What fans it does have, it has for making the internet accessible to complete technophobes.
So perhaps I misunderstand their use of the word "advertising", but what, exactly, do they plan to advertise with?
Somehow, I just can't see big money rolling in to put banners across the top of "my cat fluffy's homepage" or the literally millions of what amount to the web equivalent of "is this thing on?".
But good luck to 'em. As much as I hate TW, and have traditionally made fun of A-O-Lusers, it saddens me to see the last of the original great ISPs slowly dying off.
Re:'Splain it to me, Lucy... (Score:1)
Re:'Splain it to me, Lucy... (Score:3, Informative)
I don't hate Time-Warner for one reason: DVD.
Back in the early days of DVD, they were the only studio that whole-heartedly supported the format. They were the first to stick their necks out and remaster their films with anamorphic transfers, the first to do special edition DVD's, the first to do dual-layered DVD's, the first to break the $20 mark for new releases, etc. Without them sticking their necks out for the format, studios like Paramount and Fox might still be getting away with
Re:'Splain it to me, Lucy... (Score:2)
Good Idea (Score:3, Insightful)
So, basically, people fed up with getting abused by their paltry customer service quit, and they lose money. To solve the problem, they shift to ad based revenue, cutting retention and service, pissing off even more people via the further reduced service who then quit, allowing them to shift to even more ad-based revenue.
It's brilliant I say! Brilliant! They've perfected some sort of perpetual money machine here!
Re:Good Idea (Score:1)
Re:Good Idea (Score:1)
Layne
For Whom the Bell Tolls (Score:5, Interesting)
It's safe to say that AOL has died, but the body doesn't know it yet. At one time it was a lot of people's portal to the Internet, especially in the pre-DSL days, but now I can't honestly understand why anyone keeps it. With on-demand Internet connections and browsers readily available, there's no need for this cheesy portal application, unless you're stuck using dial-up, but those numbers continue to fall rapidly.
AOL never saw the forest for the trees -- popularizing the Internet forced up connection speeds and access, and eventually they were outstripped by Yahoo, Google, and everyone else.People got tired of being kicked off and having to log back on, or paying too much on their phone bill because their "local" number was anything but. Once AOL had a large enough subscriber base, and once all those folks got a taste of the true Internet, they made demands that AOL couldn't meet, and so now they are soon to be relegated to the dustbin of history. There may come a time when people won't remember what the "A" in AIM stands for, and then AOL will be truly gone.
Re:For Whom the Bell Tolls (Score:1, Troll)
As far as dialup, it isnt going anywhere soon (Telco and Cableco have very little interest to serve rural areas), but there are *far* better op
Re:For Whom the Bell Tolls (Score:2)
I got my mother off aol by buying her a dial up and setting the default homepage to yahoo. Over several months I got her addicted to their stupid card games. It worked except she still has trouble going to a url. She actually types in "keywords" into yahoo to get to sites. It sucks in the sense i got her to trade one short bus to the internet for another, but at least its cheaper. She laughs at my dad who still requires aol to do anything. (they're divorced)
In my case, I'm technically savvy
re: Why keep AOL? (Score:3, Interesting)
AOL with more ads. Great. (Score:3, Insightful)
Everybody who is dumb enough to use AOL keeps using it, but doesn't pay.
The true cheapskates of the world sign-up, but since they are cheapskates, the advertising really isn't going to work on them very well. Advertisers abandon AOL.
AOL ends up dying. Thank God.
Ads are invasive (Score:3, Interesting)
It gets to a point where I see so much advertising, I dont even notice it. I know sub-conciously its supposed to be planting the seeds in my mind to buy things, but my spending habits have not changed other then necessities since I first started making money... I just see this method as a failure in the long run. I think the business of the future will be successful first due to customer service, and a very close second on quality of the product. Everyone is so connected now due to the internet, word of mouth advertising should become more and more viable as a primary advertisement source, and we can finally have our mental space back...
Ah-ha! (Score:3, Funny)
*ducks*
Kill it with fire! (Score:2)
Yes... we think you've had a good run, but perhaps it's time to take a rest, hmm? You've been working really hard.
Just lay down here and have some delicious kool-aid.
#1 most frequently overheard comment during merger (Score:4, Funny)
-Eric
Great, as if AOL wasn't slow enough (Score:2, Insightful)
I have a better idea for AOL. Make your service something people actually want. Make it fast, make it simple, make it cheap, and most of all make it about the customer rather than your thinning wallets. I would have no problem s
New slogan (Score:2)
Really, how many times have you seem some business' comercial on tv, or businesscard on a bullten board (the old fashion kind with cork and pins), and it had an @AOL.COM email address, and thought 'how tacky and unprofessional?'
Pure Crap (Score:5, Interesting)
I'm sorry, but that's what AOL is. I've had the displeasure of having to deal with them for YEARS.
I'll just be nice and ignore the fact that they bought and killed The Imagination Network, which was a blast.
Let's talk about their software. Their software that, to this day, takes like 30 seconds to start up, if it's feeling fast. Their software that often crashes after closing so when you think it's gone it's actually there sucking up 100% (happens almost daily on one of our computers). Let's talk about their integrated software suite that made since back when no one had a web browser but is now just an annoying piece of bloat-ware that should have been replaced 5 years ago minimum.
But they are going ad supported. You don't say. You'd think they were now based on using their software. In the last few years, they have gone to incredible lengths to cram ads on EVERY SINGLE SCREEN they display. Your mailbox? It has ads. Reading an e-mail? It has ads. Their welcome screen? Ads.
About a month ago, they started something new. When you exit AOL... an ad comes up. But it isn't just some little ad. It's as big as the welcome screen and it always seems to be for AOL.
But wait, it gets better.. that ad has a close button. And AOL doesn't exit until you press it. That means that choosing "exit" from the file menu DOESN'T EXIT AOL. This also seems to happen before you log off, so good luck if you don't have an unlimited plan for some reason and you forget about this.
I can only tell you from having to support my parents on AOL for the last 5 years or so (they've been members longer, it just wasn't so bad before) that AOL is a NIGHTMARE. It's amazingly slow. It crashes. If it gets screwed up (and it has) reinstalling often doesn't fix it. When you upgrade, it makes a new folder in Program Files and leaves the old version there, but deletes the shortcuts to it. Nothing like looking at someone's computer and seeing 5 copies of AOL. They continually add terrible software that only slows things down OUTSIDE AOL like their virus protection (we already that had), their firewall (WE ALREADY THAT HAD), and more. And there is something to be said for a program that keeps ALL the users downloaded files in some random directory by default. That was acceptable back in the Windows 3.1 days, but ever since Windows 95 those thins are supposed to be in My Documents. But instead, this are spread across the computer. Can't find a file? Did you open it in AOL? Then it isn't where it should be, it's in C:\Program Files\America Online 9.0 Security Slowdown Edition\Something\Or\Other. Also, what other e-mail client DELETES THE MESSAGES YOU'VE READ? You read a message, and when you log off it gets moved to "Read Meassages" or something like that. And the stuff in that folder, seems to get deleted. I don't know if it is the next time you log off, or after 1 week, or what. But if you don't specifically save it somewhere or keep choosing "Keep as new" (what my parents use) then it will go away FOREVER.
I've tried to switch my parents off. I've tried to get them to use IE or FireFox (instead of their constant problems in AOL). I've tried to move them over to GMail. I think I'm getting closer. I can't tell you how much easier my life would be without AOL.
Ah, AOL. You only outlived your usefulness about 7 years ago. All you've done since then is make things worse for everyone else. You were good at one point. It's telling that you've been hemmoraging subscribers for years, and the only way you managed to stay around during the boom (when EVERYONE was buying computers) was by generating 0.5% of all trash in the US with those stupid CDs that were put in EVERY MAGAZINE PRINTED.
Oh, yeah, then there is the Time Warner merger. That was a stroke of genius, huh.
Anyway, the point of this whole rambling anti-AOL post was that AOL already puts ads everywhere. Either their are raking in the cash and don't need the subscriber fees, or they are going to be in trouble when they do this because there is nowhere else to put ads except video ads in the background of the AOL window.
Re:Pure Crap (Score:2)
It's been a long time since I last used Win95 (thankfully), but I believe that "My Documents" was introduced in Windows 2000 (although an equivalent, differently named system was used in NT, of course).
Other than that, I agree - applications shouldn't be spraying user-specific files all over the filesystem.
Re:Pure Crap (Score:2)
I personally don't know why microsoft doesn't work on some clever way to treat the desktop as a part of My Documents though, seeing as most computer illiterate people still save all their files there.
Erm..
\Documents and Settings\username\Desktop is your desktop.
\Documents and Settings\username\My Documents is your "My Documents" folder.
it is treated in entirely the same way.
In fact, Desktop has the advantage of being a shorter name, and constant across language-editions of windows ("My documents" is transla
Re:Pure Crap (Score:2)
I haven't used AOL in 10+ years and I remember the ads. They were always trying to sell something.
Uh oh (Score:2, Interesting)
In related news (Score:5, Funny)
AOL is AOL is AOL is AOL... (Score:2)
No matter what method it tries to use to separate thier customers from thier hard-earned dinero, it's still AOL.
Same lousy service, same reputation as the dumbed-down "Intar-web thingy", same monthly shipment of drink coasters... er, I mean CDs.
This almost looks like NetZero's early dialup model... but it's still the same old AOL.
Not for me... thanks anyway.
Re:AOL is AOL is AOL is AOL... (Score:2)
Basically, they want to try to emulate Google, but without the respect or 'do no evil' motto.
1990 called (Score:3, Insightful)
They still run on telephone modem due to restrictions imposed by the FTC from the TW/AOL merger - AOL cannot use TW's cable resources unless TW opens their pipes to competitors (which they have refused to do).
No geek of any stature would even think of subscribing to AOL and there is a uncomplimentory generalization of AOL members when they post to a forum.
AOL's solution to the spam problem is a whitelist which you have to pay a fee to send mail to.
If you send an email to an AOL account that is dead, you don't get a bounce so you have no feedback if your friend received it. Over time people stop bothering to email to any AOL account.
There are better alternatives to AIM and it has no place in the office. TW tried to make AIM the corporate messaging standard and it failed miserably.
AOL is on the blacklist at corporation IT departments. AOL software takes over your PC and requires a complete reinstall to remove it, which is not a favorite pasttime of IT.
AOL does everything possible to keep their members in their "walled garden" - you cannot even change the home page in the AOL browser, it is fixed at AOL dot com.
There is a growing backlash against aggressive mass marketing and people are getting tired of AOL junk mail CDs landing in their mailbox.
AOL goes to great lengths to prevent members from unsubscribing. Frustrated customers will tell all there friends to stay away from AOL. That's not how you build loyalty.
Someone please tell me how a shift to advertising revenue model is going to solve all this.
Re:1990 called (Score:3, Funny)
In my book, AOL became obsolete the day they started sending their spam on useless CDs instead of floppy disks. They switched from being my free supply of removable media to becoming a totally useless annoyance. You'd think that they'd at least have the courtesy of sending their junk on CD-R/Ws, but no, all they sent was shiny coasters.
Re:1990 called (Score:2)
This is no longer accurate; Time Warner has been allowing competing providers to sell broadband service that traverses TW cable lines... And AOL is definitely among the providers sharing the lines. Here are a couple of ARP packets that just came over my Time Warner RoadRunner connection:
redundant? (Score:2, Interesting)
Considering the amount of ads paid-subscribers endure, I'd say it's been effectively "ad-supported" for a decade now. At least, from an end-user perspective there will likely be no obvious change in AOL's appearance/presentation.
Unless they plan to replace what little remaining unique content they have with ads . . .
New cancellation policy (Score:3, Funny)
What is exactly implied? (Score:1)
Given the recent relaunch of Netscape, and the launch of AIMpages, it seems AOL is trying to restructure itself before it's too late.
This should be expected, considering last year's investment from Google, as well as their continuing decline in market share.
It seems AOL is trying to become an all-in-one solution for the Web2.0 era.
The problem is, what does this exactly imply for their users?
Oblig David Spade reference (Score:1)
Please let AOL die... (Score:1)
A slow, painful and quiet death. The days of the Kindergarten are over. Let's put AOL alongside Prodigy and Compuserve in some museum so we can reminisce on 386 processors and 9600 baud modems.
Switch? (Score:2)
Fantastic idea. No, really. (Score:5, Insightful)
Dwindling user base? Here's the cure.
Flood them with mandatory advertising through your connection client. I'm sure that lots of modem using people are going to be double-plus happy waiting all that extra time downloading megabytes of extra rich shockwave advertising content at 56k, and then wading through it all just to get their email. Freaking brilliant.
If you call to cancel (Score:5, Interesting)
Re:If you call to cancel (Score:2)
Problem is, they probably won't let you do that. Have you tried? "I'm sorry, sir, but if you'd just let me help you..."
Re:If you call to cancel (Score:2)
I don't even know what you meant by "they probably won't let you do that" -- in the past 72 hours, I've switched over 12 people to "free" and have printouts of the confirmation email (for backup, obviously).
This is free as i
Re:If you call to cancel (Score:2)
I realize you weren't targeting me. I don't necessarily mean me. I'd encourage those for whom I'm a "geek guy to call" to either detach completely from AOL, or watch their bills very, very closely in case the "free" becomes no longer free.
One big motivator: "I promise I won't force you to learn anything other than Gmail, but if you continue to use AOL for your email, I won't help you when you have problems."
That
Goodbye! (Score:2)
Its the subscription model (Score:2)
All the subscription companies are failing. itunes has their service and the people have voted with their wallets - the people are not attracted to the drm or subscription lock in service but guess what - AOL is dying, the myriad subscription music services a
Missed out on broadband (Score:2)
Dewey, Cheatem, and Howe (Score:2, Insightful)
There's no way we're going to keep uncle Homer and aunt Ginny off the web, and no real reason to want to. I can't remember the last time a search engine returned a page of someone's blurry photos of their cat. What w
Re:Dewey, Cheatem, and Howe (Score:2, Informative)
Re:Dewey, Cheatem, and Howe (Score:2)
(And seriously, all you AOL-haters, when's the last time you used it? Or really, had any dealings with AOL whatsoever? I go years without noticing they even still exist.)
By the way, I do have one more thi
customer service and retention departments (Score:3, Insightful)
AOL just has a rep, and not a great rep. Nobody wants their crappy interface anymore which is bloatware.
Can't they just not suck? (Score:2)
One word... (Score:2)
I Work There - Here's The Deal (Score:2, Insightful)
I'm one of those evil AOL "retention" agents except I'm not an idiot like the guy in the recording you all heard a few weeks ago. It is astounding how things have changed here at the AOL call center since the incident with the cancellation call recording being on the Today Show. A few weeks ago they would fire you for not hammering the hell out of these people calling to cancel. They expected us to "save" every single caller and lying was acceptible and encouraged
Re:I Work There - Here's The Deal (Score:2)
The september that never ended... (Score:2)
Tech Bubble (Score:2)
Their anwser: Lower Quality?? (Score:2)
2. Further decrease the value of the service by diluting it with ads
3. ???
4. Profit!!
Stupid.
-matthew
Too late (Score:2)
Wait, you're talking about AOL users here (Score:4, Funny)
"Install our free screensaver and it will speed up your Internet tubes 200%!!!"
Re:Wait, you're talking about AOL users here (Score:2)
"Install our free screensaver and it will speed up your Internet tubes 200%!!!"
"Most online services broaden your bands. AOL widens your pipes, so you can be sure your band fits on myspace!"
Re:Article = +5, Funny (Score:2)