CGarcia,
Much of what you say is absolutely true. When AOL raised raised rates, I expected them to lose more customers than that lost, indicating they have not reached the point of elasticity yet where increased prices would lose customers.
However, you comment that 90% of it's customers are computer illiterate...they won't get smarter folks Actually, I think they will get smarter. I've used this analogy before but a good one's worth repeating. In 1899, there were an enormous number of newbie automobile drivers, all of them "auto illiterate," to coin a phrase. Now, in 1999, the only newbie, auto illiterates are 15 year-olds with learners permits and everyone else is much smarter than drivers in 1899. The same thing will happen with computing and AOL will, of course, have to grow more sophisticated with their customers.
Actually, one of the strongest "sticky" applications, those that keep people on AOL, is chat rooms which require almost no bandwidth. At least one of my neighbors, a former AOL dialup subscriber, got @Home and still uses "bring you own access" because of chat.
Best,
--Steve |
