AOL: Why pay?

NY Daily News quotes AOL EVP Kevin Conroy today on the cool entertainment content being launched: “Imagine 27 channels that were never available before on the Web, plus email for everyone.”
According to AOL market research–and EVP Jim Bankoff–current subscribers are spending to get customer service and all in one protection from viruses, spyware and Internet predators. “They didn’t say they were paying for the content. They expect that to be advertising supported, ” Bankoff says.
That’s fine, and if Yahoo can do it, I’m sure AOL wonders why they couldn’t, but I’m curious how many paying subscribers are going to leave in the wake of this shift in plans.
If you can get free email, free content, and IM without that monthly nut, why not go for it?
Surely, AOL has done the math and concluded they can gain more revenue–and hopefully higher margin–from this latest a la carte strategy, but it’s a radical refocus that may leave numerous customers confused.
(On the other hand, AOL’s gotta do something, right? And it just wouldn’t feel right to focus on becoming the web services partner for Time Inc, CNN, and Warner–those bridges were long ago burned, even if some of the brands are still floundering out by themselves in web land).

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  1. Gordon says:

    Hey Susan, just imagine if AOL had listened to you years ago….those TW bridges would be reinforced concrete, and generating millions of $ by now. Oh well.

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