AOL’s dial-up service could be in worse shape than previously believed, with a former executive telling the New Yorker [subscription required] that 75-percent of the people who subscribe “don’t need it.” According to the unnamed ex-exec, 80-percent of AOL’s profits come from subscribers, “many of who are older people who have cable or DSL service” but are unaware that they needn’t pay the old AOL dial-up fee in order to access their email.
“The company still gets eighty percent of its profits from subscribers, many of whom are older people who have cable or DSL service but don’t realize that they need not pay an additional twenty-five dollars a month to get online and check their e-mail. “The dirty little secret,” a former AOL executive says, “is that seventy-five percent of the people who subscribe to AOL’s dial-up service don’t need it.” Ken Auletta, New Yorker
According to AOL’s most recent SEC filing, subscription revenues and overall subscriber numbers are down; just 4.1m at September 30 2010. The 10-Q also confirms that 43-percent of AOL revenue comes from subscriptions; it’s not clear how the source figures that the profits are primarily from subscribers.