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AOL Planning Move to Ad-Supported Model

Posted by ryuzaki0 on from the free-but-not-at-all-like-beer dept.

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.''"

3 of 161 comments (clear)

  1. 'Splain it to me, Lucy... by pla · · Score: 2, Informative

    The company will begin relying on advertising sales rather than monthly fees paid by customers

    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.

    1. Re:'Splain it to me, Lucy... by elrous0 · · Score: 2, Informative
      As much as I hate TW

      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 shitty, overpriced VHS tapes and overpriced laserdiscs with no extras.

      A lot of the credit for DVD's success (and the incredible value it brought to the consumer) goes to Time-Warner and the fact that they stuck with the format back when people were still predicting it would fail.

      -Eric

      --
      SJW: Someone who has run out of real oppression, and has to fake it.
  2. Re:Dewey, Cheatem, and Howe by bishorange · · Score: 2, Informative

    I use AOL in the UK and can honestly say I have never had a problem with them at all. I am on ADSL+, have only had one days interrupted service in 5 years (which was a BT problem anyway), there are no caps and I have not experienced any traffic shaping, multiplayer gaming latency has been very low and very reliable. Maybe it's different in the USA but here in dear old blighty things appear to be very much different. Okay I have no need of their software (AOL 8 ad nauseum) and never installed any versions of it and never will until all the silly services are removed. I think AOL are very foolish selling off their ISP side of the business, after all they are one of the largest providers here in the UK and have a lot of customers shelling out monthly subscriptions, which would seem a better revenue model than the one they now propose.