How AOL Gets 3.5 Million People to Keep Paying for Dial-Up

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The secret to AOL's 3.5 million dial-up subscribers: they're not paying for dial-up. Completely baffled the fact that not only do 3.5 million people still subscribe to AOL's dial-up service, but the company signed up 200,000 new subscribers just this year, we asked AOL spokeswoman Maureen Sullivan let us in on their magic. "We've been able to offer increased subscription offerings to our long term customers, who in some cases don't want or need dial-up access," she told The Atlantic Wire. "What other services can we provide to them, that they value?" AOL asked itself. So it keeps the money rolling in by offering other important services, like McAfee Security and Suzanne Sommers Sexy Forever, a weight loss program for women over 40.

The AOL subscriptions come in various flavors, ranging in prices from $9.99 per month for a bare-bones package to $25.90 per month for the highest level "AOL Total Advantage." It is not a great business. In the company's latest earnings release, revenues from subscriptions were down 22 percent. But it's still big money with $192 million in subscriptions reported for the quarter, 36 percent of the entire company's revenues. This is how they described the mini-boom in new subscriptions in their earnings release

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Subscription revenue  declines  reflect  a 15 percent and 3 percent decline in domestic AOL-brand access subscribers and average revenue per subscriber, respectively. During the quarter, AOL began a price rationalization program and migrated certain individuals who did not  previously  receive access service  (and therefore were not included as domestic AOL-brand access subscribers) to a higher priced plan with additional services that included access service. As a result, domestic AOL-brand access subscribers increased by approximately 200,000, leading to a lower year-over-year rate of decline than we have seen in recent quarters

Some of those subscriptions, Sullivan told us, also apparently include people who live in areas without access to broadband. And another subset of people use it as a backup. But that really doesn't sound all too appealing. Reverting back to dial-up from Broadband sounds like death. Remember how long it took to download those Napster songs? Days! Considering how far Internet has come from its screechy, sloth-like roots, the continued existence of AOL's dial-up business and growing subscriber base astounded the Internet. But it turns out that these people aren't just paying for dial-up they're paying for other services. You can check out the full list of "deals" at what AOL calls its Lifestore. We guess AOL's just very good at scaring people into selling security systems?

This article is from the archive of our partner The Wire.