TELECOM Digest OnLine - Sorted: Time Warner Plans to Build AOL Subscriber Business

Time Warner Plans to Build AOL Subscriber Business

Kenneth Li (
Tue, 10 Jan 2006 21:17:26 -0600

By Kenneth Li

AOL is planning moves this year to improve its cash-generating, but
shrinking subscriber business, a top executive at parent company Time
Warner Inc. said on Tuesday.

The online division of the world's largest media conglomerate has
watched its once thriving dial-up Internet access business lose
millions of subscribers over the past five years.

It currently has about 20.1 million U.S. subscribers, down from nearly
27 million at its high point in 2002.

But Jeffrey Bewkes, chief operating officer of Time Warner, said its
AOL division planned to make improvements to its subscription business
this year, particularly in attracting more customers to purchase
services that include high speed Internet access through partnerships
with access providers.

"Growing the subscriber base is not something we should all give up
on. We haven't," Jeffrey Bewkes, chief operating officer of Time
Warner told investor at a Citigroup media, entertainment and
telecommunications conference in Phoenix, Arizona.

AOL currently has deals to sell its service together with broadband
service through Time Warner Cable and Verizon Communications Inc.

"We're going to be working on broadband subscriptions of every kind
and every level of premium service," Bewkes added.

Last year, AOL focused on transforming its business to boost its
online advertising revenue by offering for free more features for
which it once charged.

Although plans to bolster its free Internet properties continue,
including a deal announced on Tuesday to purchase online video search
company Truveo Inc., Bewkes said the two businesses complement each

Subscribers to AOL services provide a captive audience for ads.

"You can get a lot of benefits in the audience business if you have an
appropriate subscriber business," Bewkes said.

Bewkes said AOL ranked as the second most highly visited Web property
by unique visitors. But he added: "We're not second in the
monetization of that."

Asked if the company considered splitting the subscription business
from its "audience" or free Internet business, Bewkes said it was,
"possible (but) I don't think at this point it's desirable."


AOL's purchase of Truveo, which provides them with "Visual Crawling"
technology that searches the Web for video files, precedes the launch
of a more robust video service this year, AOL executives said.

Truveo's technology is able to better distinguish videos on a Web site
that are often missed by other software, executives said. Web crawlers
automate the copying and searching of sites that process the data for
search engines.

The company, which will debut In2TV, a free service offering vintage
Warner Brothers television episodes over the Internet this month, also
plans to begin charging for programing this year, Kevin Conroy, an AOL
executive vice president told Reuters in an interview.

"2006 is the year we deliver a video search experience that is as good
as what people expect with text search," Conroy said.

Copyright 2006 Reuters Limited.

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