Much has been made this week of AOL announcing that it has lost nearly 300,000 members last quarter and blaming it largely on member migration to broadband. Some experts said the online division of the world's biggest media company would not survive the hemorrhage of members much longer. Others posited that the traditional divisions of AOL TW would carry the weight until the webbies figure out how to hold on to their members. But what about this broadband claim? A recent Edward C. Baig column in USA Today took issue with AOL's new Sharon Stone commercial for the company's broadband service, which shows the actress in bed after an apparent romp with AOL's running-man icon, who promptly dashes off after Stone asks him if he can stay. "The spot is an amusing juxtaposition, but it also points up a coincidence that AOL Time Warner didn't intend: The only ones leaving the scene lately are AOL's own dial-up members," Baig writes, going on to say that he is not particularly impressed with the company's broadband offerings as of yet. And it is those offerings - billed as "must-have" programming and services - that AOL executives are hoping will keep dial-up subscribers from leaving altogether and instead converting them to high-speed AOL users. Will the company be able to convince the public that most of its offerings are compelling, unique and worth the price? Analysts are hesitating to wager any bets, but most agree that AOL has very little time left to come up with a winning plan of action. According to various reports, as of March 2003, most users in the US connect to the Internet using dial-up modems of 56Kbps or less. 53.26% use 56Kbps modems, 9.79% use 28/33.3Kbps, and 3.17% use 14.4Kbps modems. All told, 66.2% of home users in the US connect to the Internet at 56Kbps or less. Mostly due to the Iraq conflict, broadband penetration in US homes slowed somewhat in March. As of March 2003 broadband penetration was at 33.8%, up from 33.5% in February. In contrast, broadband has increased by over 1.2% per month from October 2002 to February 2003. Extrapolating the data provided by Nielsen//NetRatings, broadband share in the US should exceed 50% by June of 2004. eMarketer predicts that by 2005, nearly one-third of American households will have broadband access.
Now that the war in Iraq has settled to a predictable conclusion, the question in newsrooms all across the country is: what's next? At MSNBC.com the question is followed by a need to follow a less predictable conclusion. That conclusion is the one that placed it first among general news sources for the month of March. According to Nielsen//NetRatings data, MSNBC nosed out rival CNN by about one million unique users for March at 24.3 million. "The question of 'what's next' is certainly the big question," said MSNBC.com editor Dean Wright. "The war provided a big boost in traffic for us, as did other major news events. So the challenge is to hang on to the users that you added during that period." Wright believes that the reason MSNBC managed to win March lies in the increased support the site gets from co-parent NBC, as well as a commitment to broadband. Wright said MSNBC streamed 87 million feeds from Iraq. He also credits the viewership MSNBC gets at work, which is where he said the site spends "a great amount of resources." "We have become a very distinct part of the NBC family and we are more closely enmeshed than ever before," Wright said. "That closer tie is one of the reasons I think that we spent resources to increase our usage at work, and our reach certainly went up there." From a content perspective, the question "what's next" has a different tone. Not only does he need to hang on to those 24 million users, he needs to figure out what will keep those 24 million users interested in a post-war world. "We have to make sure we boost our breaking news coverage," he said. "You'll see a lot more health coverage, a lot of technology coverage and a lot more entertainment coverage. Instead of presenting the viewer with a collection links, we want our cover page to illustrate the things that are important at that hour."