Living in the middle of nowhere in a lower middle class family, I can't thank AOL enough for all the free trials they sent our way. It was my introduction to tech.
You know dial up deserved a better fate. For me, I realized it was dead for real about 7 years ago. I setup a US based dial up account as a backup for a vacation that included some remote places. It did work in a cabin in a cell signal blocking valley, but not in a hotel - where of course PBXs are all now VOIP. Irony indeed. Worst of all is that a "real" POTS line cost more than a cell phone.
Related question: is it still true that if you are willing to pay (was like $100+/month) local telcos must sell you a ISDN BRI line? Anyone out there in oh say, the Nevada desert with such a connection? Satellite then? Or are you just on AOL?
> Related question: is it still true that if you are willing to pay (was like $100+/month) local telcos must sell you a ISDN BRI line? Anyone out there in oh say, the Nevada desert with such a connection? Satellite then? Or are you just on AOL?
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I was curious about this as well. Looks like there is no requirement, although AT&T will still sell a BRI for $55 a month "anywhere a normal analog line can be placed"[1]. But Verizon has discontinued it in some parts as well as CenturyTel.
"Or are you on just AOL?" Ha, you should rephrase that: "Or are you just AOL?".
>90% of AOL's ~$150mm annual revenue comes from their dialup customers.
They're not really getting new customers, but their average customer lifetime is 14 years. It's basically elderly people who have had autopay set up for ages.
I wonder what percent is people who can't be bothered to fix it. I've been telling my mother for the past two years she no longer needs to pay for AOL to access her AOL email account, yet she does nothing. She pays something like $20/month for the fucking service.
The "friction" of changing a habit is enough to keep most people with their existing habits. Also knows as, 'people don't like change'.
Over the past few years as my parents approached fixed income (with little savings, they didn't save/invest anything until several years ago), I've been steering them towards habits that offer savings, without sacrifice (i.e. going to a different supermarket, changing telco providers, etc.). Keeping the same things, just lowering the bill. However, my mother is the one who is "in charge" of these things. A campaign to simply change a service provider takes about a year. Even if everything is provided for them. The amount of resistance encountered for her to spend 20 minutes to do something is huge.
After the change, she'll agree it was a great change and even advocate to others that they should do it too. She'll never admit she should've done it when first suggested and empirically shown it would offer no degradation but save money. Yet that friction is very real.
Age isn't a factor either. I know people in their late 20s and mid-30s who do exactly the same thing. People don't like change, and the friction of having to do anything is enough to result in people doing nothing.
That's probably not that common. Much of their membership attrition likely comes from the inverse of that: people passing away and as their estate is wound down their account will be shut down.
What's fascinating is that Verizon purchased AOL for $4.4B this year. With AOL's publishing business only raking in ~$10mm per year, I'm really curious how they valued the dialup business. Did they just straightline membership attrition percentage and assume it'll decrease steadily? Or did they do an in-depth analysis of members ages and life expectancy and assumed lifetime membership to calculate a more granular remaining CLV? Now that's a morbid thought...
Beyond that I think Verizon bought AOL
1) for a company with some experience with digital advertising, which is where I think Verizon sees a lot of its growth potential. There's only so many mobile phone subscribers in the US and landline business isn't really growing too much. See its accquistion of the TV company from Intel (they spent $1 billion for a NFL contract to stream games on mobile for 4 years).
2) it's still profitable and $4 billion really isn't very much for Verizon (Verizon itself was the $130B buyout of the Vodafone share by Verizon communications)
Thanks for catching that. You're correct that overall revenue is much higher, but the cost of traffic acquisition eats into that significantly.
It's actually Adjusted OIBDA that's $10mm for the Brands group, which is arguably a more accurate figure to reflect the value of the division. Check out the table on page two of the 2015 earnings report at your link for the full breakdown.
