In response to your post....
...In fact, once these content
providers have built up a name for themselves, why wouldn't they move. AOL
subscribers can get to them on the net just as easily as if they stay with AOL once
they have a subscriber base built up. Look at Barnes & Noble, for example. Once
their site has built up a subscriber base, they will do one of two things: 1) threaten to
leave AOL for the net unless AOL agrees to reduce their fees, or 2) just leave for
the net. Either way, AOL isn't going to get a lot of money out of them.
All the companies you are talking about already have a net presence. They come to AOL because they know they need a consolidator of subscribers (ie. more customer views of their ads/page). So none of them need to leave for the net...they are already there. As for building up a "subscriber base," why do you think they came to AOL? They wanted to target the over 8 million subscribers, the largest base of any on-line company. You think if B&N or Amazon.com leaves AOL that there will be a mass exodus of subs? No, because they are already on the net.
...On the other side of things, AOL is going to have to face continuous
technology costs just to compete. Once they finally get the 56k modems up and
going, then they're will be another advance. Unless they continually upgrade,
customers will leave for faster and better access with other providers or new
upstarts. What about AT&T's 128k plans? Cable companies, satellite companies,
etc. that are all going after the connection market. In short, AOL is never going to
hit any jackpot, they're going to just sit they're festering. It's a never ending
treadmill--if they ever stop spending money on aggressive marketing (MSN has the
luxury of simply picking up customers because of the way the software is bundled)
or technology upgrades, they will bleed subscribers.
Bleed subscribers? Did you check that previous post with the table of subs? Notice only two companies had an increase in sub base...AOL having the largest increase. Modem, 56k x2 and flex, ISDN, tcp/ip...AOL supports all of them. Let me remind everyone that MSN, AOL, Compuserve and Prodigy are all bundled in Microsoft software. Obviously, more consumers are choosing AOL when the choice presents itself. I guess you could say they all have the "luxury" of simply picking up customers because the way the software is bundled. Seems like AOL is better at it than the other three.
Happy investing all...
S. |
