AOL adds to broadband capability, features By Paul Davidson, USA TODAY
America Online, the No. 1 but troubled Internet service, this week is beefing up its new broadband product with more prominent video and audio content.
And it will back it with the AOL Time Warner unit's first nationwide broadband ad campaign, as well as a special discount offer.
AOL also is rolling out user features for both high-speed and dial-up customers, including virus-scanning and more robust e-mail, and spam and parental controls. The offerings will be launched March 31 with a download called AOL 8.0 Plus.
"The goal is to sound a clarion call for broadband," says Lisa Hook, who heads the broadband service. AOL for Broadband will be touted in a three-month, $35 million ad campaign that attempts an image overhaul for the company.
AOL amassed its 35 million worldwide users by making it easy for novices to get online and pounding that message home in ads and promotions. But as the Internet matured, growth slowed. Its subscriber base dipped for the first time in the fourth quarter as now-experienced members defected to discount dial-ups and to the in-house high-speed offerings of phone and cable companies.
The ads abandon the longtime "it's so easy" message to portray a hipper, edgier AOL. The campaign is an acknowledgement that AOL can no longer count on luring new users. Rather, it aims to retain existing customers and drive many to broadband.
In October, the company unveiled a special version of AOL for broadband users, featuring exclusive rock concerts, movie trailers, sports highlights and a 175-channel, CD-quality radio service.
Executives told analysts in December that it would push the broadband service more aggressively. And since AOL has had little success striking deals with cable companies to bundle AOL, they said they would push AOL broadband content as a $14.95-a-month add-on to users' existing $40-a-month cable or phone high-speed access. About 2 million subscribers get AOL high-speed content that way, vs. 600,000 with bundled service.
An introductory deal will offer AOL for Broadband for $9.95 a month until the end of the year.
"That's more in line with what most people say is realistic," says Gartner analyst Denise Garcia, noting Yahoo recently launched a $9.95 video and audio subscription service. IDC's Jonathan Gaw says AOL is testing the $9.95 price point and could retain it.
AOL for broadband enhancements in the new version add:
- CNN and ABC News premium video services to existing NBA, NFL and NASCAR clips. Other deals are in the works, AOL says.
- At-a-glance weather forecasts, stock quotes, TV listings and other data for an always-on connection.
- Firewall protection to guard against hackers.
- A video search service and ability to attach video or audio clips to e-mail or instant messages.
Enhancements for both dial-up and broadband users add:
- AOL Communicator, an upgraded e-mail that integrates subscribers' other e-mail products.
- Exclusive content from Time Inc. magazines such as People and Entertainment Weekly, which will no longer be free on the Web.
- A premium $5.95-a-month option that lets subscribers get their voice mail and e-mail together — both online and on their home voice-mail service.
It's a lengthy list, but Jupiter Research analyst David Card is not sure it will sell. "There's not a lot of exclusive content," he says.
James Bankoff, who heads AOL programming, notes, however, that other subscription services, such as Yahoo and RealNetworks, simply offer premium content, while AOL adds practical features to the package. "AOL's value proposition is much broader than anything else," he says.
Gaw agrees that AOL might well draw subscribers with firewalls, virus-protection and other practical features. "Those are things people will pay for," he says. "Video is a tough sell."
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