AOL Inks Cross-Promo Deal With Time Warner Cable Sibling
- by Ross Fadner , April 22, 2004
A sampling of AOL's entertainment, games, personal finance, sports, and life management services will be available to Road Runner subscribers, in addition to new original content samples from Sessions@AOL, video game insider information from First Tip, and celebrity chat from Celebrity Connect. Road Runner customers will be presented with ample opportunities to upgrade to AOL's premium services.
As another part of the deal, Time Warner Cable Digital subscribers will also have access to a 24-hour on-demand AOL music video channel that features "the best of AOL for Broadband music content," as well as other studio and live offerings from popular artists. The channel will launch in May.
"The best way to entice people with a new service is to let them sample it first," says Kevin Conroy, executive vice president and COO, AOL for Broadband, America Online. "Until now, the only way to discover the value of the AOL service was to join," he says. "We're very much moving in the direction of sampling our service outside our membership," says Conroy, adding that several new sampling deals with broadband service providers are on the horizon.
Such partnerships are part of AOL's "bring your own access" broadband strategy, which essentially offers consumers the ability to sign up for AOL for Broadband in conjunction with any service they like. They then pay $14.95 per month for basic content, or $24.95 per month for premium content.
Most importantly, the move underscores an attempt by the content kingpin to open its closed doors--a little. In recent months, AOL has moved to make AOL.com a gateway for non-members to sample its content, and has attempted to attract third-party content providers outside of the Time Warner family of brands. AOL is also moving to an HTML-based system.
But Conroy says that the move does not mean a shift in AOL's closed subscriber-based network strategy. AOL's primary long-term goal continues to be to drive membership, he says.
EMarketer Senior Analyst Ben Macklin remains undecided over whether moves like the Time Warner Cable deal will be enough to recharge AOL after a string of successive quarterly slumps. "I've been examining AOL for three years now," says Macklin, "and I think this was a good idea maybe three years ago." Macklin adds that while AOL has had the access and content combination for a while, "there never seemed to be synergies between the two."
Macklin points out that AOL Instant Messenger and Love.com are good, successful examples of their experiment in ad revenue-driven free consumer services, but other efforts to become more portal-like have been largely unsuccessful.
Macklin adds that AOL entered the broadband game late, and is currently paying the price for it. "[AOL] rested on its laurels with dial-up, thinking it was going to last a little longer than it has," he says, adding that by 2005, "less than a year and a half from now," there will be more broadband households than dial-up households, according to eMarketer data.
But Macklin also notes that AOL is still far larger than both Yahoo! and MSN, its closest competitors, which he says are essentially "content aggregators."
"I wouldn't write [AOL] off just yet--perhaps its quarterly results will show whether or not the former strategies have taken the desired effect," Macklin says.
Time Warner reports first-quarter earnings April 28.
