But how can you get to substance, details, without having precise definitions of the subject at hand?
By using whole sentences. You know- a string of words that describe what you mean.
Surely it exists but the loss rate to all cable according to AOL runs less than 1%
An interesting but highly misleading statistic. AOL has 25 Million members. 1% is 250,000. I'll bet that when he said that cable in the US was around 1 Million (dont forget that AOL is a minor player in Canada). I'd say it's pretty reasonable to say that 25% of early cable adopters come from AOL.
What happens when @home is 3 Million? 6? 10? The % of subscribers taken from AOL will rise to match AOL's market share (about 50%). In two years ATHM will have stolen 3-4 Million AOL customers. In 5 years it could be nearly 10 million taken. That doesnt even include the new internet users who pick @home over AOL right from the start.
3 million users is 3*12*22=$792,000,000 in subscription revenues per year taken from AOL. Some of course will stay with the "Bring your own access" plan. I'd guess about 30%, but for the sake of argument lets call it 50%. That results in only $612,000,000 lost.
When you throw in the $ they make from forced advertising it could easily approach $1,000,000,000 in lost revenue. Thats in a couple of years- it gets even bigger after that. That ain't chump change even if AOL manages to keep growing in the meantime.
Lets agree to this: ATHM barely registers on the competition scale with AOL right now. Its like the little league champions taking on a major league professional team. Give em a couple of years to grow- then you will agree it is competition.
Eric |
