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AOL Not Alone In Subscriber Decline
E-Rock-23 writes "Our registration-hungry friends at the New York Times are running this article with a few more details on the AOL Subscriber Decline, covered in a recent /. post. And it looks like they aren't alone, as Earthlink and MSN are experiencing similar troubles. The article cites a major reason being that users "are buying broadband services offered by cable and telephone companies." Looks like broadband is finally gaining some significant ground with home users..."
Yeah, broadband is a nice upgrade. But I bet more people disconnected due to money than the need for speed.
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....the big 3 ISPs have seen the writing on the wall for a LONG time, yet they continued to expand their POTS infrastructure...ESPECIALLY earthlink. They better figure it out really freaking quick that when users find out that they can work just a little harder to find the same content through a non-branded ISP, they are going to drop their asses in droves. Looks like they already are. AOL has the potential infrastructure through Time Warner Cable...Earthlink has been able to finesse some cable sharing deals, but MSN going the DSL only branding route is going to lose if they don't sign some cable sharing deals.
I don't get it, are they surprised? AOL costs 25$ a month. In my area you can get get DSL for 38$ so I don't think it should come as a surprise that people would go for a connection ten times as fast that didn't require the worst designed software on earth for an extra 13$. AOL has been robbing people for the past 5 years, they kept their prices jacked up because they could and had a corner on the market.But I doubt AOL is really noticing too much of a hurt, because I have noticed idiots who get broadband and still pay for AOL as well. People are dumb and that will keep AOL and MSN in business for a long time.
Anonymous Cowards - Oh God, How I hate you
Although I was with a local ISP, the cost of the 2nd phone line was $25.00 and my ISP was $15.00. Broadband through the cable company was $40.00 so it was a complete wash for a huge increase over 56k, why would I want to stay on dialup? They can thank all the baby bells for not wanting to go the "last mile" to give people a choice of providers.
More cable users = less bw for you if you use cable.
:-)
:-)
More cable users = irrelevant for you if you use ADSL.
More ADSL users = irrelevant for you if you use cable.
More ADSL users = irrelevant for you if you use ADSL.
Hence, choose ADSL
Remember: more broadband users = bigger market for pr0n = more pr0n 4 u!!!
Daniel
Carpe Diem
As a former AOL employee, I still have an AOL account even though I find the service has ticked me off more than a few times but my wife can't really change her email address at this tmie. So we are like so many who just are waiting for the right time.
You can't stop the future, you can only simulate it by stopping progress
sign up for AOL. He can't afford broadband (yet). He just started using the internet. As soon as he finds the pr0n movies for download, I'm sure he'll drop his smoking habbit so he can get broadband and pick up a new (better?) habbit.
With streaming content becoming more available and higher quality, the days of dial-up are numbered. I'm suprised apartment buildings don't pool together and get a T1 into the buildling and provide internet to all apartments.
--------
Free your mind.
Everytime a NYT story is posted on /., new registrations there go through the roof!
Thats why I bought a domain. My email address is permanent regardless of my provider. Changing emails is a real pain. ISPs rely on that - so they give great introductory offers, but raise the rates once they have you sucked in. With my own domain, I can changes ISPs painlessly.
In the UK, most people who have broadband service receive it either through as ISP, who in turn use either BT (DSL) or one of the two cable operators, NTL and Telewest (Cable Modem/STB). A lot, like me, probable go direct through the service provider (in my case, NTL).
AOL UK has recently started offering broadband services, through BT, but I've yet to see any figures on how much success they've had with it. MSN UK haven't made any moves on that front yet.
-MT.
I was one of EarthLink's earlier subscribers, and appreciated its services, which were quite reliable.
My business needs required something faster than dial-up, so when EarthLink offered DSL, I applied. At the time, however, DSL wasn't available for my part of the city (a medium-large midwestern one--think race cars), so Time Warner Cable's RoadRunner service was my only option.
Today, as a result of court agreements and such, EarthLink and AOL can provide their services through cable and DSL options, but the carriers (the cable and phone companies that own these lines) don't advertise the options much, from what I see.
I use Comcast High-Speed service today, which works OK, but they have tech support that's about as bright as a bag of coal.
I agree that the Internet was a fascination for some, and now a relatively expensive one to those who don't use it much. So, many of the users who've signed off are probably the "sightseers."
High-speed access is still a bit too expensive for most, despite the faster speeds. Paying twice to 2.5 times as much isn't a strong marketing point.
Vos teneo officium eram periculosus ut vos recipero is.
Yes. And so does Earthlink. We use them so our traveling salesmen can have cheap local dial-up access wherever they go. They're billing, customer service, and support are all so awful we've given up the luxury of laptops w/dial-up for the most part and just use blackberry's. Calling Earthlink for any reason is hysterical. In most cases we really could dial the psychic hotline and get better results.
Operator, give me the number for 911!
The closed nature of their networks mean that independent ISP's (even the monster Earthlink) will no longer be able to compete with phone companies. Here in CT, the nearest competitor to SBC DSL has to charge at least $20 more than the service from the phone company. They rent the DSL services from the telco, making it impossible for them to compete. The days of infinite ISP choices are sadly over.
www.lonseidman.com
I think the broadband push is one determining factor in changing from the powerhouse ISP's, but I also think users are *growing up* from AOL/MSN to using only their preferred browser. I consider AOL/MSN users to be novice and prefer to use these ISP's because of ease and simplicity. Now these users are gaining knowledge of the "internet" and have the ability to *surf* themselves without AOL/MSN pushing content to them directly.
string.Empty();
isn't what is used to be.
.swf files via E-Mail to 20 different friends and the like.
Here in Germany you can get a 128kBit up / 768 kBit down async line. The best a normal household can aford is 192 kBit up / 1536 kBit down async.
The problem is that as bandwidth goes up, quality of the net goes down.
I heard people saying: "Why should I not place these 2MB images on my website? It's downloaded with my DSL line in seconds."
And don't even try to tell these people what a thumbnail is.
It's just one example but you can find more of these. People sending 15 MB
SQL Slammer won't have had the effect of broadband coming to every home.
See my blog for my free opinions.
http://archive.nytimes.com/2003/02/03/technology/0 3ONLI.html
Excellent point on the mobile work force. I remember traveling with my laptop and struggling with horrible hotel-internet. If there is one good thing about national dial-up like MSN and AOL it is that I can go anywhere in the country and get access instantly.
If I were more of a mobile warrior, I would definitely have AOL or MSN.
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Free your mind.
Ok, so with the number of cable broadband subscribers going up, it makes sense that the cable companies can finally (hopefully) start collecting on those economies of scale. So when will we start to see the price stabilize? Or are we stuck with endless rate increases a la cable television?
I've already given up on DSL from the phone company (Good luck getting competitition-inducing rates from those guys.)
IMHO community run broadband (see this link) and other means like this are the only hope we have of keeping prices reasonable.
Erp, did I just come out in favor of regulating Internet pricing?!?
With the coming of wireless internet, it even becomes simpler to share the net (you don't even have to dig or drill a line in the ground or wall for your ethernet cable). I think this also has some impact on the decline of dial-up subscriptions.
The question I see is, if the RIAA's intimidation/anti-consumer tactics (or DRM-etc) gain significant ground, and downloading mp3s, movies, etc becomes too difficult, will home users really need a 300kbps connection? (I'd never go back to a 56k modem that never connected faster than 22k, but that's just me).
Actually, now that I wrote that, I think they do--who knows what else will take the place of them though. A real-time slashdot feed perhaps?
Wer mit Ungeheuern kämpft, mag zusehn, dass er nicht dabei zum Ungeheuer wird. --Nietzsche
I work for a small, privatly owned ISP. I do see alot of our older dial up customers going over the broadband, but more and more, they are cancelling because of lack of money. Even at around $20 a month or so many people see internet access as something extra not something they need.
Maybe this tred will turn around but I doubt it. Even if these customers do get back on firm ground, I see them going with broadband via cable, phone company, or even the electric company long before comming back to a dial up.
At $23.50/month, AOL has less customers than at $20.00/month.
...
Price goes up, quantity goes down-- that's a demand curve.
nb: There's other reasons for the decline too, AOL and MSN blow as ISPS and don't support linux and censor tons of content in the newsgroups, and break your Network Connections and
A few weeks ago I got a mailing from Earthlink saying I could save $5 by switching my cable internet service from MediAT&Comcast to Earthlink. Aside from the $5 difference, I could not find a reason to switch, and the $5 is tiny compared to what I'm paying for the service in the first place.
If Earthlink had a different TOS (I could have servers, for example), then I might consider switching. If the only change is I have to install Earthlink software instead of ATTBI software, then it's rather pointless, isn't it?
Beware: In C++, your friends can see your privates!
No I think that its more people going to their local providers (cable, dsl etc..) people are more literate than they used to be no longer is AOL the internet.
Since I work alot with the public and their computers let me tell you what I think the biggest reason for the decline is.
90% of the houses I go to are for people who are upgrading and now want two computers. (Their old one + their new one) AOL requires a $20 subscription fee + more money for multiple screens and though you can have broadband and still use AOL they still charge an aol usage fee.... *yawn*
So they upgrade to broadband because that 56k stuff has to go and because it can easily service two computers, they buy a router, they leave AOL but download the messenger to stay in touch with their buddies. They migrate to using Outlook Express (cringe) But they also have norton so I guess thats ok... sort of.
Then they also cancel AOL + Second Phone Line and broadband is about the same price. Some even cancel their phone and do VoIP. (Its rare but there are some really good offers out there that even offer wireless phonejacks that you can sticky to your wall or plug into an outlet...)
While dial-up is a relatively cheap product to deploy and support, the broadband products are expensive and more complicated. The additional cost means that ISPs can't afford to move into all of the same areas that they could with narrowband. So in some areas, especially more rural parts of the country, customers are having to leave the three major ISPs to go with their local telcos to get a faster connection. Most ISPs don't own their own DSL equipment anyway. They go through the local telcos themselves or through companies like Covad. To do this ISPs have to establish contracts with these companies to resell their services. This cuts into their revenue as the ILEC's get a piece of the pie as well.
Another problem is that broadband is not as profitable as dial-up currently. Whereas dial-ups bring in $8-$10 a month on average, broadband products bring in the neighborhood of $5/month. Sometimes the the ISPs don't see any profit for more than a year (if ever) as they offer deals for free modems and discounted service fees.
As an employee and one of the 3 largest ISPs I can tell you that IMO the cost of broadband isn't going to be going up anytime soon as long as the CLEC's continue to convince the government that competition is a good thing. But you can expect to have your ISP try to sell you on additional services like static IP, VoIP, priority tech support, Long Distance telephone service, and offer discounts for longer contract terms.
I think this is a common feeling in the tech community without that much basis in fact. I used AOL for years and found it no worse than any other dialup service I had ever used - it was more expensive, but I could always get connected when I wanted to and never got dropped. (YMMV, of course)
IMHO, AOL gets a bad rap from the tech community because of the obscene amounts of script kiddies who run off their parents' accounts on it. Because it's so huge, it's also automatically evil to groups of techies who use Linux just because it's not Windows.
They've got 3 call centers now instead of 7.
Basically, you'll NEVER get through to them now.
20% of their workforce has just been laid off.
Atlanta-based access provider EarthLink (Quote, Company Info) on Tuesday announced it would shut down call center operations in four U.S. cities and lay off about 1,300 employees as part of a cost-cutting move.
With its dial-up subscriber base dwindling, the nation's third largest ISP said it would close its entire call center operations in Dallas, Texas; Sacramento, Calif.; and Seattle, Wash. Additionally, a tech support and customer service center in Pasadena, Calif. would also be shuttered in the latest belt-tightening move.
"We estimate the streamlining of our call centers will reduce annualized operating expenses by more than $20 million," the company said in a brief statement.
I think it is not just people using broadband. I think it also has to deal with the fact that people no longer need crutches online. AOL and MSN are really geared towards people who don't know too much about the Internet. When you get used to doing stuff on your own, those extras MSN and AOL provide become more of a nuiscance than anything else. At that point people usually go for a more basic ISP that gives you access to the Internet at a cheaper price with more reliable (as in easier to connect) service. There is a reason why people make fun of AOL users after all...
There's a growing sense that even if The Future comes,
most of us won't be able to afford it.
-- Lemmy
hhhmmm...let's...AOL and MSN both have propritary winblowz spyw^H^H^H^H clients. they loose many of their customers after the trial period as many don't want to pay for their advertisements, poor customer service, etc.
now let's look at my local cable provider. their network has been fairly reliable thus far. no software to install (though they do try and convince you to run their install program that puts their logo in the corner of IE and sets up your mail settings). my only REAL complaints with my cable service is that they block port 80, (because they don't want me to run a "server"...i guess they think a web server is the only type???) and i can only transmit at 128k while downstream is supposed to max out at 1.5M.
of course, i can live with those small irritations when i'm downloading the latest kernel source, mozilla, p0rn, and openoffice in a matter of min. instead of hours.
-frozen
I'm not always the brightest pixel in the stream
And I'll be one of them if they don't change their attitude soon. I am tired of their 15k upload cap. It's freakin ridiculous! I encourage everyone who switches from Comcast to some other ISP to tell them that it is BECAUSE of their upload cap. Maybe they'll start listening. (I can't get DSL, not available yet... and sat costs too much).
I don't know how well cable (comcast) is going to develop - for two months they failed to show up to even install the line - so I went with Verizon DSL and the service has been fast enough for my tastes (used to a university ethernet!)...anyway I just finished doing some private home wireless networking jobs for small business people buying dsl for their homes and wiring all their XP machines together. I get the feeling the at very least DSL (cheaper and NOT the cable company) is about to score BIG with the cheap wireless products you can pick up anywhere nowadays.
~frank
"Other bands play, but Manowar KILLS"
Picture a production executive: "Why should I not agree to do this terrible movie? People will see it anyway." A theater owner: "Why should I not perpetrate the single largest price gouge that the average American sees over some kernels of 'popped corn' and sugar water? People will pay." A person in charge of showing the movie: "Let's put this movie in 8 screens, so everybody sees it all at once, and everybody forgets about it in 3 weeks. Then, let's do it again!"
The problem is that the problem feeds itself. So does this one. You know what the solution is? 'tis like a marketer's dream... More solutions! Bigger broadband, better broadband, different broadband!® And some will buy it, and some won't, and some will still be on dialup, but it will be different, and that's good, right?
You're right. But once you let the average person into something, they usually ruin it.
What this shows is simply that the AOL model of bundling connectivity with content is failing.
We all knew it would... it makes some sense to use content to sell connectivity. But that means you have to either break even or lose money on the content, otherwise your connectivity will be overpriced.
Another approach is the revers... using connectivity to sell content. Again, same situation... you couldn't make money on connectivity.
AOL's early success convinced a lot of people that there was some natural synergy between the two. There's isn't. AOL's business model (and the Time merger) are based on the theory that by combining the two, they could make more money on content AND more money on connectivity. Can't work.
Even more amazing is the number of companies that saw the growth of AOL and concluded that bundling the way to go. Excite@home was one of the most spectacular failures that was fueled by this erroneous analysis.
I thought one of the principal arguments used to support the DMCA was to speed the acceptance of broadband. As I recall, the rationale was that the additional protection for digital media distributions would spur the offering of digital content. In turn, this would increase the incentives for consumer adoption of broadband.
With very little in the way of conventional entertainment available (the RIAA has killed most and movies don't exist), an increase in broadband acceptance appears independent of the incentive. All that really happened was the consumer got shafted.
The little guy just ain't getting it, is he?
For example my mother was paying $20/month for a second phone line and $20/month for her ISP. We got rid of her second phone line and the ISP for a cable modem that costs the same, $40/month.
Another phenomenon that phone companies and ISP's have to worrying about is people not having a landline at all. Most people I'm friends with (age 22-28) do not have a landline, but instead use a cell phone exclusively. There are lots of benefits of using a cell phone only. For people with roommates, you don't have to worry about splitting up the phone bill or dealing with calling cards. On a cost basis, I would rather pay $75 for a really good cell plan than a landline with no long distance for $40 and a cheap cell plan for $35.
Most of the people who I know who use a cell phone exclusively are also cable modem subscribers. Those who are not, just use work for personal Internet access. Of the people I do know with landlines, most of them have to have them in order to dial-in to their company's network because of the absence of a Internet VPN.
I've been landline free for three years now, with no regrets.
or anyone else is a BAD THING. As your local cable/dsl provider gets a strangle hold on the market you can be sure the prices will GO UP not down. We are seeing it with cable TV already, in area's that ATT is a monopoly are already seeing a rise in cost while they CUT services...De-regulation is everybodies friend...NOT. SBC is already larger than it was before the government called it a monopoly and broke the bells apart...Thanks Bush
errr....umm...*whooosh* *whoosh* Is this thing on ?
I run a small business and use email to notify my clients. I send out 50, or so, emails once a week.
Unfortunately, 1/2 my customers use AOL and AOL has a really nasty habit of silently dumping some, but not all, email from other ISP's. So, a couple of days after I had sent out the weekly notice, I would get calls from some of my clients saying they hadn't gotten their weekly status report. Dicking around with Sbcglobal over several months wasn't getting me anywhere so I finally bit the bullet and bought an AOL account just so I could reliably reach my clients.
I'm not happy about it but I don't have the time to sort out AOL-Sbcglobal email incompatibilities. What really is annoying is that it was only my AOL clients that had problems getting their email reliably.
If I was smart, (that's a big if ), I'd stop using email and have my customers go to my website to get their weekly status reports. Then when they complain about how slow AOL's browser is I can steer them to a non-AOL solution and earn a referral fee. The fee isn't worth much but getting more people off of AOL certainly is attractive after all the grief I've had from AOL.
Geesh, I use to work for an ISP out west and had to deal with a baby bell.. People complain about the price of dsl being 2x more than dial up, so what, with up to 50x faster speeds that's a good deal if you ask me personally. You really have no idea how much money needs to be put into it every month just to turn a profit from the ISP's standpoint, especially when they are a reseller of DSL through a CLEC/ILEC. First off reselling DSL makes you target numero uno on the phone companies list, you're digging into their profit. If they charge $39 for a circuit and $1 for their internet that's $40.. Well the ISP has to pay for that $39 too or the customer does going through the ISP depending on how billing is structured. An ISP can not afford taking a hit by charging $1 to a customer for access, it's just not feasible. The phone company can charge so little for dsl because even in not making a profit on it they have you locked in as a subscriber plus make it up in high phone service charges. In the DSL world 200 subscibers on a T1 is just not feasible as it will saturate it, but a T3 or DS3 will do the trick, that's alot of money a month for that pipe, at a $1 a customer = $200/mo in charges. Show me where you can even find a T1 for $200/mo off of a reputible company. This is why there are fly by night ISP's they simply CAN NOT compete with that pricing so they have to charge more. Also there is alot more involved with the biggers companies screwing reseller isp's that the normal consumer has no clue about and these things do happen as I have been witness and victim to them first hand. Just a thought for everyone
Most people who have the option wait to do some of their surfing at work on a fast connection. For people who don't have that option, they must pay for a faster connection or accept that some web content and services will be barely usable or unavailable.
In my apartment, my roommates and I all share a single DSL line split by a Ethernet router. I know many others that do the same thing. Being able to easily divide a DSL internet connection is another big advantage over dialup. If hadn't convinced my roommates to switch DSL, AOL or MSN could have 3 more customers.
Multiply this by 250,000 households and you could have another cause of the decline of there subscriber dialup base.
Chew: You Nexus, huh? I design your eyes.
Roy: Chew, if only you could see what I've seen with your eyes.