March 27, 2003

AOL Time Warner Searches for a Business Model

CNET reports:

AOL Time Warner pulls free Net magazines | CNET AOL Time Warner will move the free Web sites for a number of magazines into its America Online proprietary service, signaling the media giant's attempt to fortify AOL with exclusive content.

Beginning Sunday, the popular magazines People and Entertainment Weekly will no longer offer content on their Web sites for free. Content will be accessible only to magazine subscribers and AOL members. Newsstand buyers are granted access to content on the publication's Web site, but only for the duration of the magazine edition they purchase.

In the month or so following the initial launches, other titles will make the same move, including Teen People, Sports Illustrated Kids, Real Simple, InStyle, Sunset, Southern Accents, Time for Kids, Costal Living, Cooking Light, Southern Living and Parenting.

"We are making the move from the content being available for free, and (instead are) making it so you have to have a relationship with us," said Peter Costiglio, a Time Inc. spokesman...

If we are representative, it's going to work. The Nine-Year-Old really likes the "Time for Kids" website...

Posted by DeLong at March 27, 2003 01:53 PM | TrackBack


Wow, things have gotten so bad, I don't even agree with Brad on this one. I think this is a hopeless move. If the same mentality had been in charge in 1995, AOL would never have given its members access to the Web, and its subscriber base would never have grown from 1 million to 30 million. If the Time-Warner suits and their precious "content" continue to make decisions, AOL could make it all the way back down to less than one million subscribers.

Posted by: Arnold Kling on March 27, 2003 04:34 PM

I suspect Arnold is right--and that my household is not representative...

Posted by: Brad DeLong on March 27, 2003 05:07 PM

The article in question may have incorrectly stated the effective date of the change in policy.

I checked the websites for People, Entertainment Weekly, and InStyle, and they appear content-free right now...

Posted by: j seiver on March 27, 2003 07:36 PM

Relationship? Sheesh ... I want a low-transaction cost financial service with acceptable availability and access, not a lovefest with a credit card. Does anyone else find the implications of "sticky" or "magnetic" media sites rather distrubing, that they can substitute for personal human interaction?

Posted by: LL on March 27, 2003 09:02 PM

"I think this is a hopeless move."
Clay Shirky asserted that micropayment will never work. Well, - albeit in in a limited way - it actually is taking off in Germany. The two necessary conditions for success in this respect seem to be
a) product differentiation (e.g., you sell hard-facts-type of information with demonstrable business value - not applicable in the AOL case)
b) price differentiation: paid-for music downloads will be marketable if the price is sufficiently different from that for music in disc form. Early data in Germany confirm this.

This just means that there is not going to be another bonanza propelling the whole economy into an unsustainable boom. "People" and other such "assets" might indeed not do much good for AOL´s bottomline.

Posted by: Joerg Wenck on March 28, 2003 03:34 AM

FYI - another cut at micropayment/publisher solution as reported by Rafat Ali: "Pico-Pay, an Australian micropayments company in gestation for more than a year, has launched its service. The technology is based on the premise that advertises will subsidize any article a subscribers/user wants to view...if you think that is complex, read this story and it is explained well here. It is an ASP solution, and according to the company, users of the service need only a web-browser to gain full access to all the features; no additional software, smartcard, credit card or ancillary technologies are downloaded, installed or required. I haven't yet tested out the service, but will and write up a short review. Have to check with them if they have any clients as of yet."

Posted by: Hylton on March 28, 2003 09:14 AM

Brad - There is more than enough on PBS / KIDS, and we adults can even make it without "People" though it may be a bit of struggle....

What does AOL/Time have that we have to have? We get free copies of all sorts of Time magazines for our offices and seldom bring them home. "Time for Kids" is fun, but these kids are happily busy and say they will not miss it.

Imagine, AOL actually bought Time/Warner. Synergy, twas shouted, and how many billions wasted? Hello, I must be going.

Posted by: anne on March 28, 2003 01:06 PM
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