As an individual consumer, wouldn't I be in a better position if I could use my membership in a group of 9 million other consumers to attract better terms and incentives from companies looking for my business? How about the ability to converse with people of similar interests who may have experience with a certain product or vendor that I might be interested in? You know the saying- strength in numbers. How would you create that strength using your scenario?
Hi MW, hope you had a good week. Those are very good questions which I hadn't previously considered.
Strength in numbers is a point well worth addressing, as I'm pretty sure this is the sum and substance of AOL's marketing plan. However, the bulk of whatever pricing concessions AOL might receive from the vendors they host will most likely go to AOL's bottom line, not their subs'. If they do manage to throw their subs some crumbs, they won't be able to maintain it because the pricing competition from the rest of the Internet will be relentless. In fact, I believe AOL's offerings will tend towards being somewhat overpriced, compared to the rest of the Internet, so that AOL (the middleman) can receive a piece of the action.
Essentially, you have a potential "buying cooperative" of 9 million vs. the total of all other potential buyers on the Internet, which itself is a kind of cooperative, since it is a subset of all consumers worldwide. AOL's strength in numbers will only be of use to the extent that AOL's membership is widely regarded as an audience of docile patsies, too timid to look for better pricing outside of AOL. I don't see AOL's long term advantage in this regard and would not build a business plan based on it.
The ability to converse with people concerning a particular product/vendor would, on the surface, appear to be a point in AOL's favor as well. Still, the Internet is full of special-interest chat -- AOL does not have a lock on this. Furthermore, the Internet is full of uncensored special-interest chat. The fact that you hang out on this thread (and I'm very glad that you do) speaks volumes. AOL, at its core, vends and markets one product, above all others, extremely well -- its own stock. Why are you doing your research here? Shouldn't the other subs at AOL have the definitive last word on AOL's market valuation, pricing, service, and quality? If the answer is no, why is that? Could it be that members on the chat board over there are blinded by their own enthusiasm for AOL? Or, (and I don't have any first-hand proof of this, but I have heard that this happens), does AOL actually censor those posts that are less than flattering to AOL?
Either way, any vendor setting up under the AOL umbrella will potentially exhibit the same one-sided, excessively positive opinions from their chat areas, whether those opinions reflect reality or not. This "captive chat" will not serve as a reliable basis for selecting on-line vendors. |
