Comment Re:What's the point? (Score 2, Interesting) 397
Despite what other posters seem to think, this switch, if properly promoted, could get AOL more subscribers. By tying TW properties into AOL's internet service, they've achieved the holy grail of ISP's: product differentiation.
Basically, dial-up internet access is a commodity, and has been since the mid/late '90's. There are some variations in customer service, e-mail/web space, and other little things, but ISP's are essentially offering the same product (access to the public internet) for the same price (~$20/month). For most customers, choosing a dial-up ISP might as well be done by flipping a coin. This is not the ideal situation for businesses, since they really don't have any basis for competition beyond flashy commercials and price cuts (not much of a margin for those). If you can't differentiate yourself from your competition, it's hard to increase your market share.
AOL now has the opportunity to truly separate themselves from their competition. History buffs might recognize that this is what AOL (and Prodigy, Compuserve, etc.) had in their early days. There wasn't much on the internet, and so they were able to sell unique content: chatrooms, magazine articles, software downloads, etc. Of course, all of that stuff eventually sought out a wider audience, and much of what made AOL unique diffused across public space, accessible to customers of any number of ISP's. AOL was now in the unenviable position of competing against (comparatively) bare-bones ISP, who could offer unmetered access at lower monthly rates. Despite the fact that AOL has consistently cost a few dollars more per month, they maintained a large customer base (inertia and advertising being the biggest reasons, probably).
Now, AOL has something to sell. Lots and lots of magazines. TV shows and movies. Access to a media empire (Wasn't that why they merged in the first place?). When consumers are deciding on an ISP, this will influence their decision. For a few extra dollars a month (I think it's $23.95/month compared to $19.95/month for other national ISP's, but correct me if I'm wrong), subscribing to AOL gives you access to the whole internet PLUS exclusive TW content. I suspect a lot of people will look at this as if they were getting dozens of magazine subscriptions for $4 per month, if it's marketed properly.
Of course, it might not work like this. Frankly, I think most people who want to be online are already online. The same inertia effect that's kept AOL's subscriber base intact might keep people from switching to AOL, even if they think they'll get a better deal there. There may not be many new customers to be found. Another danger is that if this isn't marketed properly, potential subscribers won't realize what they could be getting; the extent of TW's media holdings can't be overemphasized in any ad campaign. The only effect would then be to piss off non-AOL subscribers who currently read TW content online, but won't be able to in the future.
Bottom line: if done properly, this could get AOL/TW a lot of new subscribers. Do it poorly, and they'll just alienate a great number of people.
Basically, dial-up internet access is a commodity, and has been since the mid/late '90's. There are some variations in customer service, e-mail/web space, and other little things, but ISP's are essentially offering the same product (access to the public internet) for the same price (~$20/month). For most customers, choosing a dial-up ISP might as well be done by flipping a coin. This is not the ideal situation for businesses, since they really don't have any basis for competition beyond flashy commercials and price cuts (not much of a margin for those). If you can't differentiate yourself from your competition, it's hard to increase your market share.
AOL now has the opportunity to truly separate themselves from their competition. History buffs might recognize that this is what AOL (and Prodigy, Compuserve, etc.) had in their early days. There wasn't much on the internet, and so they were able to sell unique content: chatrooms, magazine articles, software downloads, etc. Of course, all of that stuff eventually sought out a wider audience, and much of what made AOL unique diffused across public space, accessible to customers of any number of ISP's. AOL was now in the unenviable position of competing against (comparatively) bare-bones ISP, who could offer unmetered access at lower monthly rates. Despite the fact that AOL has consistently cost a few dollars more per month, they maintained a large customer base (inertia and advertising being the biggest reasons, probably).
Now, AOL has something to sell. Lots and lots of magazines. TV shows and movies. Access to a media empire (Wasn't that why they merged in the first place?). When consumers are deciding on an ISP, this will influence their decision. For a few extra dollars a month (I think it's $23.95/month compared to $19.95/month for other national ISP's, but correct me if I'm wrong), subscribing to AOL gives you access to the whole internet PLUS exclusive TW content. I suspect a lot of people will look at this as if they were getting dozens of magazine subscriptions for $4 per month, if it's marketed properly.
Of course, it might not work like this. Frankly, I think most people who want to be online are already online. The same inertia effect that's kept AOL's subscriber base intact might keep people from switching to AOL, even if they think they'll get a better deal there. There may not be many new customers to be found. Another danger is that if this isn't marketed properly, potential subscribers won't realize what they could be getting; the extent of TW's media holdings can't be overemphasized in any ad campaign. The only effect would then be to piss off non-AOL subscribers who currently read TW content online, but won't be able to in the future.
Bottom line: if done properly, this could get AOL/TW a lot of new subscribers. Do it poorly, and they'll just alienate a great number of people.
