CEO Calls For AOL Paradigm Shift

An anonymous reader writes "The New York Times is reporting that Jonathan Miller, AOL's chief executive, is calling for the effective dismantling of marketing for their dialup service. In a new plan to be presented to the Time Warner board in a couple of weeks, Miller outlines a new direction for AOL which moves towards using advertising as the main source of revenue while offering most everything they have (software, AOL.com email addresses, etc) for free."

Comments

Hmm AOL For free?

[opieum]

That will seem very enticing....until they start flooding the internet with more of their spam. They are using the existing setups to beat google to the free internet punch. Oh well call this AOLs deathsong. They are pretty much on the way out with a declining userbase. Poor product being made free? It's like putting a cherry on a pile of crap. The cherry may taste good but the crap wont :P

An ad for every surface on earth

[PCM2]

As someone who works in publishing, this seems symptomatic of what is a very disturbing trend to me. Somebody has to pay for content. Popular wisdom is that the consumers of that content won't pay for it. There's only one other place to go for the money, it seems, and that's advertisers.

I don't know how to feel about it. I'm somebody who hates ads. I watch a lot of PBS, tend to rent shows on DVD rather than watch them when broadcast on commercial television, or if I do watch them, I skip the ads in my DVR. Likewise, I run AdBlock and an aggressive set of filters in Firefox. My goal is to see no advertisements at all. Ironically, however, those same ads are my livelihood. Am I cutting my own throat?

Even scarier is the fact that all the movie and TV studios are aware of this behavior and are taking steps to correct for it. Product placement, for example -- it's no coincidence that guy is drinking a Coke and not a Pepsi, or that there's a big RSA Security logo on that video monitor in that episode of "24."

So if we don't want to pay for our content, and we refuse to be receptive to traditional advertising messages, how long before that kind of influence gains a foothold in other kinds of media? I work in the trade press, so we're right on the cusp of that -- some people will never believe that a story in my magazine is meant to be impartial, no matter what it says. But does anyone really think the mainstream news media -- even something like the New York Times -- is completely impervious?

I really, really do not want to live in the kind of world where every flat surface is paved with an ad, every movie is a sales vehicle, every TV show is a survey, every newspaper article is corporate public relations. But is it avoidable, given the direction our society is going?

Re:An ad for every surface on earth

[ConceptJunkie]

I agree that advertising alone is an outdated business model. I mean, newspapers and radio are really hot right now, NOT. The fact of the matter is, however, that's exactly what Google is doing, and they seem to be doing just fine with advertising providing their only revenue.

Web 2.0 has been a big buzzword for the last year, and the technological achievements and potential are impressive and exciting. But name me one Web 2.0 business that is actually a successful business! And even if there are some (MySpace?) that are generating non-trivial revenue, they are doing so through advertising.

Paying for content online has some serious hills to climb because ultimately customers want something concrete for their money. If you buy a newspaper for 50 cents, you get dozens of pages of content (and full-page bra and panty ads if it's the Washington Post), so what would be a analogous price for a single article (let's forget for a minute that most Web-based news articles consist of about two paragraphs and are barely a summary leave alone an actual article)? Would you pay to post on /.? Micropayments are certainly a possibility, but after years of "all you can eat", who's going to want to suddenly start paying per page, even for good content?

For people who aren't selling actual objects and services, whether it's Amazon selling books or iTunes selling MP3 files (which are still concrete enough to make feel like you are "getting something") or Everquest selling some Chinese slave laborer a change to farm gold, who is actually making money on the Internet without relying mostly or even solely on advertising?

In other words, if the customers aren't shopping and there's no advertising, how exactly is someone going to make money on sites like /., Digg or IMDB? I go to IMDB almost daily, but I have to admit I'd balk at having to pay to access it. AOL's past success was in providing content their customers couldn't get anywhere else, but now they can't do that any more because relatively few people are still accessing the Internet through AOL and its client.

Ultimately, I don't think the post-advertising/non-subscription business model has been discovered yet. So I don't think you can criticize AOL for doing the only thing I think they possibly can do, at least for now. My biggest criticism would be that they took too long to figure this out. But the company is too big and has far too many resources to just disappear; it just won't be the AOL we've come to know and joke about.

Re:Just a thought

[t0qer]

AOL sucks. We all know this. So they think that providing their services for free, in an advertising based model will help them.

I strongly disagree...

AOL has some really good properties under its belt. Namely, i'm talking about Winamp. Let's not forget about all the Time Warner stuff they have access to as well.

With Winamp and it's shoutcast technologies, they have a good platform for content delivery, a really smart user base that constantly provides free features for Winamp through plugins. Since the 5x series Winamp has moved beyond just being a mp3 player, it has live streaming content, access to tons of Time Warner properties (Animaniacs/Freakazoid anyone?) and there's a ton more stuff planned on the horizon.

Recently a job for Music Director has popped up. Part of the description talks about things going towards social networking in the Winamp microchasm. As we know, Nullsoft is sort of the place where new AOL technologies are being developped, so it stands to reason that the social networking on the horizon for AOL and Winamp is going to include some aspects of both communities, myspace with NSV video is my guess.

The AOL client isn't completely suck ass either. Now before I get boo's from the peanut gallery let me explain... I run my own consulting company, and today I had to do some work at a lawyers office, and she's been using AOL as her email for years. She got a new PC, wanted me to transfer files from her old PC to her new PC, then hand-me-down her old PC to her assistant. I walked in thinking "OH noes! PST and outlook!" Since the AOL email client stores all the emails on the server, it was pretty painless. It wasn't *that* bad. They just logged in with their screen names, and like magic, all their stuff was there.

The AOL client isn't too shabby for reading news or other things either. Sure you can fire up Moz, but it's really not that bad... If AIM was so terrible, why do so many people use it?

About the only thing that has been bad with AOL is their dialup. Even there, not that bad. AOL has always had the biggest banks of blade modem banks. Dial up numbers just about anywhere you can think of.

It's a shame so many people judge AOL on what it was 20 years ago. Sure, it was crap then, but over the years AOL has been pretty good about responding to customers outcries about the bad, and then AOL has always moved quickly to resolve it. Remember when folks complained about busy signals? AOL took care of it. Hard time cancelling your account? AOL fired the person who got recorded, then told all their staff to not give customers a hard time. Despite all outward appearances of AOL being a hard company to deal with, force feeding their customers what they want, in reality the opposite is true.

Anyways, I have no beef against AOL. It's made the internet easier for some people, which is a good thing in my opinion. It takes a corporation with deep pockets to accomplish what AOL has, and my hats are off to them. Money well spent.

--toq