AOL's Broadband Play

Now that the real AOL has its name back, what is their plan? Jonathan Miller, Chairman and CEO of America Online, explains how consumer behavior is driving his broadband business model.

NewsTeam | AO [AlwaysOn] | POSTED: 09.18.03 @20:20

That’s what the Internet environment is all about. And obviously this is a business model. This is something that is taking off in the industry as the products get better and make on-demand fulfillment a reality.

In this new environment, the role of content cannot be overestimated. As the statistics that I quoted in a previous blog show, people do use copyrighted media-rich content. In a highly tenured, always-on environment, this use accelerates. People want to be entertained.

Given this, what’s the model for content? People sometimes ask me if it's a paid model or not. I answer by asking them to list all of the free media-rich content services they know. And always, they don’t know of any. People are using content, lots of it, and there are no free models developing. Therefore, it’s a paid model. Obviously in the case of AOL we roll it up in the subscription, so we’re an aggregator. We bring that under one roof in our subscription.

But there is an even more profound use of content. That is, content is the catalyst for Internet use; it pushes the basic interactive nature of the Internet. You take something, you’re engaged by it, and then that drives you to use it. You share it with somebody; you add to it; you modify it. That’s the real use of content online today. Content is the driver that catalyzes the use of the Internet, makes its functionality important.

But that functionality can be impaired. There’s a potential dark side to being online. All this great functionality comes to a grinding halt if you’re not safe, if the roads of the online town aren’t paved, if the water and electricity don’t work. If there’s crime in the street, you’re not going shopping. You’re not going out to the movies. These problems can bring everything to a halt.

56% of broadband AOL households have children under 18, versus a third for the U.S. as a whole, and roughly equal to AOL’s narrow band population. For these people, and across the always-on population of AOL, the number one rated concern is parental control, safety for their family.

The number two issue is anti-virus protection. They want to be safe in their online environment. Every way we tested, these two issues scored much higher than any other concern about being online today.

But despite these concerns, when the National Cyber Security Alliance did a study of Internet use, they concluded that 67% of broadband always-on users lacked sufficiently strong firewalls. They didn’t have updated virus protection. And even though parental control was rated number one in terms of people’s concern online, 97% of broadband households with children did not use any, didn’t actually use the parental controls day in and day out. Only 11% of the always-on households surveyed had adequate safety protections. Clearly, these users need an easier way to implement safety measures.

These are some of the problems we're tackling at AOL. Take spam, for example. Currently we block about one billion and a half e-mails a day. And some days it’s spiked as high as 2.5 billion spam e-mails stopped at the gates of AOL. This is a real issue.

Now, how do you take all these different aspects of Internet use and boil them down to business principles? We think they roll up into a couple of higher-order precepts. First of all, we recognize that behavior patterns have changed. They’ve changed because of tenure and they’ve changed because of the always-on environment. Users want to be in control and always engaged. They want access to rich content, not just on the desktop but throughout the home, and—we can’t forget this—they want this access to be always protected, safe and secure.

This last point is very important, as we’ve seen during this whole boom-and-bust cycle. During the boom times it was all about the promises of the Internet. During the bust time it was about the things that go wrong. It was spam, viruses, security issues. And we’re still facing that today. That affects people’s usage.

As a company that has a stake in this industry, it is absolutely material for AOL that we help clean up the neighborhood, that we deal with these issues. We want to make the Internet a better place to transact, to share, and to send e-mails. This is crucial for the growth of the industry and for fulfilling the promise of the always-on environment. If we don’t do that, it stops the other activities, stops them cold. And it holds back the entire industry.


Next Week: AOL Responds to the Always-on Environment

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AOL simply doesn't get where broadband is concerned: no vision for transactional content......

[color]On broadband service, get whatever is the cheapest for the equivalent speed. It is an utility like telephone. I never had a reason to get AOL and unless they buy out the local cable company, will not have a reason to buy their service in the future.[/color]

How could Miller's essay possibly be more drab? Where's the description of AOL Broadband's sweeping vision of how the ubiquitous availability of broadband networks will connect more people and ideas together in a more rich-media ways than anyone ever thought possible? Where is his view of how that bandwidth will permeate our lives? (I, for one, can't wait to have Grandma babysit my kids in California -- from her condo in Florida -- via the broadband connection.) Yes... we all worry about family values and anti-virus software... but those are the basics, and we will find ways to solve those problems. But what then? What's AOL's picture of the future, and what ground-breaking ideas are they hatching that will lead consumers to make it a reality? Now... THAT would be an essay.

Miller is an ass. He's always coming up with crap about family and what not. Its BS. AOL Braodband is simply not worth it. Their services a lame and so is their brand (whats left of it)....

Print cost up to 50% less than home printing.

The missing plank in AOL broadband strategy is digital imaging,its a growing multi billion industry,their current service is a kind of "time warp" to get one digital print's,considering the "now" market,the range of imaging IP in the service is basic,with the coming camera/phone boom thats about to sweep the would,2mpixel "megapixel" announced in Tokyo this week,tens of millions of people will be walking around with powerful image capture device's-that can print lab quality prints--- the next step is to provide a service that allow those customers to free the media instantly recharge their"electronic film",share images globally instantly,is this impossible?
We have such service coming to a shopping mall near you,one can walk up to our kiosk up/download images instantly to your favourite photo account"open architecture"share ,store,print instantly lab quality prints,at up 50% than home printing,using image enhancement IP that could make any average snapper look good.
The wireless telco's are about to move into the digital print space,in a very big way,we can even extend their valuable brands.

I have a few thoughts about AOL and broadband. AOL served my purposes for a long time then I switched to SBC Yahoo but only due to a need to consolidate existing accounts. Though I must admit AOL has come a long way to resolve issues that formally produced shortcomings with their service. Spam and pop ups are managed very well and the support has always been superb. As an example of the excellent support AOL and partners provide, you may read my blog entry earlier this year where I set up a wireless AOL broadband for my parents. Still, the support is excellent and they surf the net on a totally trouble-free basis.