AOL's promotional efforts will focus on convincing people to buy its AOL for Broadband service as a standalone package, often referred to as "bring your own access" (BYOA). Currently, some 2 million subscribers get their access to the dial-up service through BYOA or from a third-party broadband provider. Now AOL is spicing up this service with features that it hopes will dazzle broadband users. The most visible of these broadband changes will be the new welcome screen that includes snazzier graphics and video-streaming capabilities. The new screen also includes different versions depending on the time of day, more links to multimedia content, and more visibility for services such as Broadband Radio@AOL and Video@AOL. AOL will redesign content channels such as its news area to include more high-bandwidth services. These additions will come on top of those found in AOL 8.0 Plus, including security features such as a firewall and antivirus software, heightened parental controls and the AOL Communicator advanced email client. AOL 8.0 Plus also will feature more entertainment content from AOL Time Warner's other properties, such as exclusive Web content from People and Entertainment Weekly magazines, movie previews, news clips from outlets such as ABC News, CNN and the Weather Channel, and sports highlights from the National Basketball Association, the National Football League and the National Hockey League. AOL's "biggest challenge is they have a massively profitable dial-up user base and the economics on the broadband side, even on BYOA, aren't nearly as compelling as dial-up", said Michael Gallant, an equity analyst at CIBC World Markets. "The world is going to broadband with or without AOL." Running with the pack
AOL is not alone in trying to offer a standalone package for broadband users. Its two main rivals, Microsoft and Yahoo!, have signalled plans to launch their own standalone subscription packages as a way to lure broadband users to their services. Earlier this week, Microsoft began courting beta testers for MSN 8.5, the latest upgrade to its Internet service, according to BetaNews.com. A Microsoft representative declined to comment on the release and would not say whether the product launch was in response to AOL's latest upgrade. Still, Microsoft's one area of differentiation is price. MSN's BYOA product costs $9.95 a month and has been earmarked by the software giant as its main draw for broadband customers. In January, Microsoft said its stalled dial-up growth has caused it to rethink its Internet strategy to focus its efforts more closely on BYOA. Yahoo! meanwhile offered vague details of its own BYOA plans in February, but said its pricing would be "competitive" to MSN and AOL. However, the Web giant last November began testing the product, called Yahoo! Plus, which included antivirus and firewall software, parental controls and extra storage, among other features. Indeed, all three of the Net giants have pinpointed selling these subscription packages as their means of profiting from the rise of broadband. AOL has one advantage in that it will advertise heavily to the mass of 35 million members it already serves. Although more of these subscribers may consider moving over to broadband, AOL can reach them first to try to persuade them to remain loyal to the service. Still, CIBC's Gallant questions whether AOL can justify charging more for a package that's similar to its competitors. "I'm not so sure consumers can view the difference between an MSN and an AOL to be $5 more," Gallant said.
See the Broadband News Section for the latest on cable modems, ADSL, satellite and other high-speed access technologies, including a comprehensive guide to the best deals out there.
Let the editors know what you think in the Mailroom.
