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AOL Reports Its First Drop In Subscribers
Flamesplash writes "Yahoo! is running this AP story about AOL's first drop in subscribers. 170,000 US subscribers have left AOL in their fourth quarter of 2002, apparently due to users becoming more comfortable with broadband connections. It should be noted though that 'AOL has said it has stopped simply signing up new customers for the sake of counting them.'"
Here's a better article from the Washington Post.
It should be noted that, 'Despite the small decline in the number of AOL subscribers in the United States during the fourth quarter, the total number of subscribers grew enough during the other nine months of the year to enable America Online to post a 1.2 million net increase in customers during 2002.'
Also, AOL is still by far the number one ISP with 26.5 million U.S. customers to MSN's 9 million.
From http://www.nytimes.com/cnet/CNET_2100-1023-983012. html:
...
Microsoft's MSN Internet service reported zero net subscriber growth in the fourth quarter of 2002, holding steady at 9 million subscribers despite the backing of a $350 million advertising campaign for its new MSN 8 service. The company said the lack of growth was offset by a shift to higher-paying customers as various incentive offers came to a close in the last three months of the year.
Earthlink, the third-largest ISP in the United States, has also seen declines in its dial-up business. The company this week announced massive cutbacks at the company as it moved to outsource its customer-support call centers.
The number of free subscribers on the service dropped from 2.9 million in the third quarter to 2.5 million in the fourth.
Yes and no. As a Speakeasy customer, I can say that you're right that the speed is better, but you're dead wrong when you say the support is better. I've never had worse support from an ISP than I've had from Speakeasy.
That statement is pretty unclear, what they meant was that AOL is not signing up free trial customers in the same numbers just to keep their subscriber count growing. The drop was in the number of non-paying trial customers, that account for about 10% of their US subscriber base of about 26 million. They have another 8 in Europe, and the rest are mostly in Latin America. Thier paid subscriber base actually increaseed during the quarter, I believe. The full details are all in their quarterly conference call available on the corporate web page, for at least another week or so.
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
AOL are a large international ISP (or IAP in legal terms) whose product is exempt from VAT in Britain, allowing them some headway in undercutting their rivals. They offer an unmetered dialup service from (virtually) any UK address although metering may be involved if your phone line is provided by one of the more unscrupulous telco's (e.g. the ones in many university halls of residence).
They do not require you to use proprietary email or browser software. They do not disconnect you after a period of inactivity. They do not block any ports, although they transparently re-route outgoing SMTP traffic. Their services are about equal or slightly better in performance than FreeServe (now that's an evil company if ever there was one). Having said all this, their service is occasionally completely shit, connecting at a snails pace and dropping you into limbo usually in the middle of a fraught deathmatch. Most of the time it is OK however.
Apparently, allowing non-computer-literate people to use the internet (or at least the pertinent popular-interest subset thereof) is some kind of deeply offensive crime in the eyes of some technical people. A few years ago there was an arguable basis for such objections, but now it seems rather like snotty received prejudice. Especially when you consider that AOL is the cheapest (or only) option for unmetered internet access in some parts of this country.
Their much-maligned corporate anthropomorphisation, Connie, is played on television by model Rachel Willis, who is the sister of one of my ex-flatmates.
Jon Stewart said this on the Daily Show thursday.
"AOL is an internet provider that can't control spam. They're on version 8 and they haven't figured out that I don't need my mortgage refinanced or my penis enlarged"
The only things AOL hasn't been advertising are the things people could actually use, like popup and spam blockers, and other reasons I switched to mozilla, not to mention standards compliance. No one cares about parental controls or more smileys for instant messenger. People are finally realizing that AOL's browser and email, etc. isn't as good as other stuff out there.
Its also slow
Everyone is born right-handed; only the greatest overcome it
AOL once made leaving so difficult (in terms of the barriers erected against finding the information needed to unsubscribe) that it's not surprising there hasn't been a higher rate of defections. Also I think you could only do it by snail mail. I'm guessing that nowadays they make this information accessible, and perhaps even allow electronic unsubscription, leading to a faster dropout rate than arrival rate.
And once people leave, they don't come back, so their growth is limited by a dwindling pool of victims.
I've had AOL for free for 8 months simply because every time I call up to cancel my free trial (on the last possible day) they extend it another two months. When asked why I'd like to cancel, I've told their operators flat out that "I'll keep using it as an internet connection as long as you keep giving it to me, but I'm not paying for it."
This is quickly followed up by a "Have you tried out keyword _______? You can't find that anywhere but AOL! How 'bout another two free months to check it out?"
I think that in its self shows they're still signing people up for the sake of counting them.
I have heard statistics floated around which indicate that for several years, AOL spent more than $100 to acquire each new member... And recouped that easily at the time. The majority of members who signed up spent well more than $100 over the life of their AOL subscription, so while there were huge expenditures up front (and probably some creative accounting somewhere to defer the costs) to woo those members, in the end most of this resulted in a net gain.
The $100 per new member figure, of course, included the number of promotional disks mailed out to people who never signed up, didn't even own a computer, etc. The term "carpet bomb" doesn't even begin to describe how floppies were mailed at the time. For a year or more approximately 1997-1998, everyone in my apartment complex received a disk in the mail once a month. There's a 33 gallon trash can at the mailbox gazebo, and you could always tell which day of the month was "carpet bomb day." The trash can would be full of AOL disks. Incidentally, this was at the time when I was into AO-haxing, so I used to nab the lot of them for the account certificate numbers included...
Speaking of AO-haxing, for quite some time fake AOL accounts would last up to a month, assuming you didn't do anything egregious. You could make a fake account and use the hell out of it until a month was up and the billing date rolled around, at which point the billing systems would kill the account. There was a reason that the accounts lasted so long, and it wasn't that AOL didn't know the accounts were bogus. They knew full well about the number of fake accounts on the system, but what they also knew is that those accounts were active. Yes, AOL sort of "tacitly ignored" fraudulent accounts (again unless you proactively did something to get them terminated) because they could claim those accounts as among their member base.
(Side note: this changed soon after AOL went flat-rate, fake accounts would be nuked as soon as the auditing systems found them. The reason? During the 5-cent-per-minute heyday, AOL could add the number of hours spent online by hackers on fake accounts to their "hours billed this month" and thus to their supposed profits. After flat-rate took effect, fake accounts were no longer a revenue booster on the books, so they cracked down.)
Fake accounts aren't the only ones which were counted as active in perhaps a misleading manner. For years (perhaps still, I'm out of the loop) all AOL employees received two accounts. One was their internal work account, which was supposed to be closely guarded. For that reason, employees also received what was called a "1+1" account: a normal, non-privileged account that they were supposed to use if they wanted to sign on from home, or share AOL with their family. Both internal and 1+1 accounts were supposedly counted among the "active member" rolls.
It doesn't end there. Accounts created with gratis promo codes, overhead status, and invoice "billing" (most invoice accounts never incurred a bill) were also counted. These were the accounts handed out like candy to radio stations, television stations, Radio Shack stores, large corporations to encourage their employees to sign up, and various other so-called "affinity groups" on the AOL service.
I could go on. But suffice it to say, AOL's number of "subscribers" has never been accurate and likely never will.