It wasn’t supposed to turn out this way.
Last week, AOL Inc. announced second-quarter earnings showing the company continues to make plenty of money, in large part from the 2.3 million people who are still AOL subscribers. For most of us, this was about as ludicrous as hearing that people are still paying for a membership to their local video store or a record-of-the-month club.
But what exactly does AOL offer its subscribers? Twenty bucks a month for dial-up?
That’s not entirely right. I went through AOL’s plan offerings. It’s mostly just tech support, and a lot of deals on things that a lot of people want. I discovered that AOL subscribers aren’t paying for dial-up; they’re paying for AOL to hold their hands as they experiment with the Internet.
I annualized the numbers so that we can compare AOL’s discounted offerings to those of its competitors (I’ve also linked to competing free software when available):
The baseline $59.88 plan — “AOL Support Plus” — gets the subscriber:
- unlimited dial-up service — which for many rural subscribers remains the only game in town — and tech support for AOL products;
- 10 percent off a Sprint plan (you would save about $42 per year on the Sprint $34.99/month plan);
- 8 percent cash back on Priceline (nothing special);
- a subscription to MyReputation Discovery (a glorified Google Alert, $156 per year);
- McAfee Internet Security Suite (an anti-virus software that puts popup ads on its own site, $55.99 per year);
- two free wills from Hyatt Legal planning (this really makes clear the customer base AOL is aiming for);
- AOL One Point, a password manager (one of many, some for no charge);
- and an AARP membership ($16 per year).
An additional $24.00 per year gets you “AOL Support and Security Plus” and:
- 5GB Norton Online Backup (similar services such as Dropbox and Google Drive are free);
- Life360 Premium (for helicopter parents who want to upgrade to spy-satellite parents. This lets you snoop on your kids for a discount; both AT&T’s and Verizon’s versions cost $119.88 per year);
- DataMask, desktop and mobile (identifies suspicious phishing sites — what Google Chrome or any other modern browser does anyway, encrypts data).
Pay an additional $36.00 per year (we’re at $119.88 per year now) for “AOL Advantage Essentials” and you get Private WiFi, a VPN service for encrypted browsing. For most people, this is probably pretty overboard. But if you want it and you buy the service independently, it costs $79.99 per year for three devices.
An additional $24.00 per year gets subscribers “AOL Advantage Plus” and LifeLock Identity Theft Protection. You can get most of what LifeLock offers on your own, but AOL’s offer is a bargain compared to the $219.89 that LifeLock costs separately.
You can upgrade to “AOL Advantage Premium” for an additional $35.52 per year, or $179.40 per year total. That gets you AOL Help Me Optimize, where AOL will defragment your computer, install updates and scan your system up to four times per year.
An additional $36.00 per year gets you “AOL Advantage Premium Plus” and AOL Help Me Set Up, where AOL will configure your printer, fax machine, scanner and router.
Now we’re in the top two tiers. “AOL Total Advantage” costs $299.88 total, an additional $84.48 per year. Subscribers get:
- AOL VIP Loyalty program, a.k.a. slightly faster AOL tech support;
- MyPrivacy from Reputation.com, which claims to remove subscribers from advertiser lists. It normally costs $99 per year;
- AOL Tech Fortress powered by AppGuard, which is an annoyingly capitalized antivirus software;
- AOL Help Me Remove Viruses, where AOL will screen-share with you and run a virus scan;
- AfterSteps, which offers digital estate planning, i.e. what happens to your email address after you die? Off the shelf, it costs $60 per year or $299 one time for a lifetime membership.
Finally, for an additional $36 per year — a total of $335.88 per year — you can subscribe to “AOL Total Advantage Plus.” That gets you AOL Help Me Fix It, where AOL will fix software issues, configure your antivirus and firewall settings, install those pesky drivers, reformat your drive, etc. (I’ve left out the PC protection plan, which starts at $250 worth of protection in the second tier and works its way up to $1,500 in the top tier, because it honestly seems like everything is exempt from it.)
So what do we see? A lot of virus protection and a lot of computer repair and installation stuff. There are good deals here for people who are uncomfortable with and a little paranoid about the Internet, hackers and identity theft. It seems like AOL is basically selling subscriptions to people who need tech support for when their son-in-law isn’t home for Thanksgiving to fix the router.
So why does this matter? How is this a good deal?
While the average plugged-in American would have no use for many of AOL’s products, it’s not impossible to imagine a subset of the populace that actually stands to gain from some of the offerings. Consider this: A Pew study from last year found that 15 percent of Americans don’t use the Internet, a fact that’s pretty remarkable. As for why they don’t, 32 percent blamed usability concerns — they think it’s too difficult or frustrating; they think they’re “too old”; they don’t know how; they are physically unable or are worried about viruses, spam and hackers.
In other words, 5 percent of Americans don’t use the Internet because they’re afraid for their safety or because they think they’re too old.
That’s your AOL market right there. Going over the tiers of AOL Internet, we see that their products are targeting the people who are just on the line between having Internet and not having Internet. And if AOL is offering to hold their hand every step of the way for a fee, that seems worthwhile. The United Nations recently called Internet access a human right, which may be a bit much, but it’s not too controversial to say the more people who have access to this system the better.
People scoff at AOL’s offerings — which I’ll admit on some level are kind of hilarious — because we’re so firmly plugged in that we don’t remember the Americans who don’t go online because, fundamentally, they’re too afraid to do so.
If needlessly expansive anti-virus and VPN and helicopter parenting are what it takes to get folks on the Internet, maybe that’s not the worst thing.