AOL Subscriber Defections Continue, Topping 1 Million
from the elevator...-going-down dept
There was a period during the mid-nineties when you could track the growing popularity of the internet by seeing how quickly it took for AOL to put out a press release announcing that they had signed up "yet another" million customers. They started coming quicker and quicker. Somehow, I get the feeling that AOL won't be doing much to promote the same milestones on the way back down. A new report says that the defections from AOL's dialup service have continued to grow, to the point where more than 1 million subscribers have ditched the service for greener pastures. It appears that AOL is getting beaten up from the top and the bottom. Many are leaving to sign up with broadband providers (since AOL did their best to ignore that market for as long as they possibly could). Others are realizing that they can pay less than half what they're paying AOL to get online with discount providers like United Online. In both cases, people are discovering that the "walled garden" content that is only available to AOL subscribers just isn't worth it.
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Late to broadband?
Many of those broadband providers wanted to keep the ISP revenues to themselves, and required that subscribers had to use the provider's ISP. AOL was trying to work deals with the broadband guys years ago. They had a few successes (mainly DSL) and got a lot of "shove off's". In response to the latter, AOL got its lawyers and lobbyists working on trying to force the providers to open up their systems to alternate ISPs, and founded the OpenNet Coalition.
This battle took an interesting turn when AOL and Time Warner merged, and AOL found itself owning the RoadRunner cable service. I don't know about elsewhere, but here in the L.A. area, RoadRunner currently allows its subscribers to choose AOL, Earthlink, or DCN as alternatives to the RoadRunner ISP.
AOL may be late to the broadband market, but it wasn't for lack of interest or lack of trying.
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Re: Late to broadband?
Not true.
(1) AOL has admitted that until a year ago they only had 8 people working on figuring out how to offer broadband services. 8 people.
Read this Washington Post article for more details.
(2) AOL has, in the past, admitted also that they've actively discouraged people from signing up for broadband. For AOL the margins are definitely lower - but that's no excuse to ignore a market that is going to eat your lunch.
(3) For most of the time since AOL and Time Warner merged, the two ISP divisions (AOL and Road Runner) have never worked together. In fact, in many cases there are reports that Road Runner actively discourages people from signing up for AOL.
The company basically rested on their dialup laurels until it was way too late.
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