Recipe for mucho bucks….probably exceeding your $3.3B profit estimate…actually
Assume the current business model but with two important difference:
1) “flip” the revenue streams.
2) Lower the cost of service (COG)
Rationale for 1)
Do not consider “subscriber fees” as the major revenue stream.
Make Advertising/Partnerships/Content providers/e commerce the major revenue stream
Example: our broadcast mediums, YHOO, radio, even sports teams are funded by ad revenues, not subscribers or tickets.
I am surprised….movie theaters are not “free” to just get the eyeballs in to see the ads….
Marketing revenues….are the name of the game….all in the interest of “sales”
I was once the VP of Global Promotions and Sponsorships for MasterCard….Do you have any idea….how much we paid…for “World Cup” exposure….for PELE as a spokesman….
Advertisers………..want quality eyeballs…….
That said……they can always get more subscribers fees from the same subscribers:
 Raise prices……(oooh…….hey, they can do that as they get more powerful and more necessary….why community is so important to these portals)
 Kill the 5 names per HH and make each nickname pay a separate fee…!!
 MMMM…..”gamesplayers” addicted to multiple names will pay or ending a lot of the “crap” that goes on…..might not be a bad idea
 Make some services…..”pay extra”….this has been tried….with some success..
Rationale for 2)
Better technology, (example 4.0 is premitting fewer online service calls…help desk is getting a needed rest)
Content providers are vying to provide the content….and paying for the privilege….hence lower cost for “original content” (the tv broadcasters wish they had that in their pockets!!)
The initial cost…is the infrastructure…..that was killing AOL profit wise…..
Now….they are further along the learning curve on infrastructure….and can reap the benefits…
Having the BYOA was brilliant…..brought more eyeballs…allowed them to lower cost to exactly those subscribers they were losing (the techies with faster ISP's….the “marypugh's”
Analogy……once you've “bought the car” …you can go lots of places with a little gas!!
Now….add lots and lots of services : All the family of AOL products
Currently…..the list has not been optimized…or even reasonably “tilled”
ICQ, digital planet….heck…even compuserve…is still in its infancy. And now movie phone….!!
Add the multitudes of other business (see their web site…for what all it is. TODAY!!
Future: Will they be doing voice/phone conferencing, will they be pagers, will AOL present TV programming… the imagination is the only limit here……
Now add…..International…..the world is out there…and AOL is snagging it…and putting the world online.
Lots of new subscribers, advertisers…..and eyeballs to look at it…
TIME FRAME: hold onto your hats…because…everyone….and I mean EVERYONE…as in advertisers, content providers, partnerships, and subscribers…are all RUSHING to AOL…
Deals are popping as fast as we can read them….have you noticed that??
OEM virtually HAVE to put it on the systems…..and AOL is “papering the world” with cds with 4.0 on it.
So…..you are in….at the right moment…..enjoy the ride…..
Mary (smiling….with tired fingers… since I had to type this twice…lost the first one..) |
