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AOL to raise rates
May 22, 2001 12:08 PM   Subscribe

AOL to raise rates I have seen this strategy used in business before. Raise rates. Lose some customers. Make up the difference and much more by new charges. Count on habit. Most people too lazy to change from what they are comfortable with.
posted by Postroad (16 comments total)

 
OK OK!
I know i ripped this off of MEMEPOOL but since we are on the topic of AOL... Check this movie out.
posted by crackheadmatt at 12:26 PM on May 22, 2001


They need to be able to afford the tech support nightmare that this created.
posted by machaus at 12:36 PM on May 22, 2001


Now the Time/Warner arm will be paying the AOL arm even more for their e-mail service, making that division even more profitable on paper.
posted by kindall at 12:38 PM on May 22, 2001


Ah yes... Capitolism at it's finest,... pretty soon they'll be only one corporation left for everything... And we'll probably sign up for auto-pay.... they'll call it "UNICORP" remember the old internet rumor that Microsoft was merging with the Catholic Church?
posted by danger at 12:49 PM on May 22, 2001


Maybe that would explain why the bastards charged my MasterCard $21.95 for an account that I don't even have! I've called three times and been told the same thing - "Oh, I don't see your card here, so we can't be charging you. You must be a liar and a scammer." Grumble grumble...
posted by starvingartist at 12:50 PM on May 22, 2001


That's like the Subway pricing model.

A turkey sub cost me $6.41 last week! I remember when it was under $5. Incredible.
posted by Succa at 12:52 PM on May 22, 2001


well, if a company predicated on free service(NetZero) can charge for ISP services, AOL ought to be getting a little more too.

i think a bigger issue at stake here is the evolution of free(or reasonably priced) services charging (more)money for use in the future. for example, yahoo has enough 'dedicated' users that they could probably get away with say...a $5 per year charge for access. it is a minimal fee yet it would stuff their coffers quite handsomely.

in fact, matt even hinted at a 'subscription' model for access to the drivel that i, and others, post here.
posted by donkeysuck at 12:59 PM on May 22, 2001


I find it funny how the news on machaus' link has a banner for MSN underneath it. :)
posted by PWA_BadBoy at 12:59 PM on May 22, 2001


Last night, I called AOL to cancel my free month of service. After several sales pitches of them trying to figure out what the best way to keep me was, I told them their service was too expensive and I never used any of the AOL-only features. The service person asked if they could give me another free month and send me information on their plans. "Free?", I thought to myself, "OK!" I said. I guess that my free month is costing everyone else. Sorry. :)
posted by LeiaS at 1:08 PM on May 22, 2001


I'm so glad I quit AOL. Even $19.95/mo was barely tolerable for their service. When they raised it to $21.95, I quit shortly after. Left them for a $9.95/mo service (which is up to $11.95/mo, but that's still half what AOL charged) and I haven't missed them one bit.

Heck, even my mother likes the new ISP better! Once she got used to not having the AOL interface, she was amazed at how much faster everything was.

starvingartist: AOL charging people for accounts they've cancelled is, apparently, not uncommon. You should probably complain to your credit card company.

LeiaS: "The service person asked if they could give me another free month and send me information on their plans. "Free?", I thought to myself, "OK!""

That's exactly how I got stuck with AOL for over two years.
posted by CrayDrygu at 1:10 PM on May 22, 2001


Since I want to keep the e-mail and web page addresses I've had for seven years, I continue to stay with AOL, however... I use their $9.95 "bring your own access" option, accessing everything through my connection at work.
posted by Ben Grimm at 1:24 PM on May 22, 2001


Right now I've got a year free with my laptop. I use it when I'm out of town, never otherwise. (Well, there was a spell where I was between ISPs this winter ...) Note that you can save back the difference by purchasing on the annual plan ... which hasn't been announced to be changing, meaning it's still 239.40/yr, or the equivalent of 19.95/mo. With the new monthly rate, that saves you $47/yr!

Also, you can save by using the ISP/LAN plan, where you "bring your own access". If you travel only rarely, this can be a winner: just accept the expensive hourly rates when you travel, or if you can plan in advance, change your plan for the month you'll be mostly away.
posted by dhartung at 1:32 PM on May 22, 2001


How about some substantive discussion of why AOL continues to dominate the non-business ISP market. I have no complaints with AOL quality-wise. But I would like to know why no major competitior is charging, say $10/month for dialup service (or am I mistaken?).

Also, it seems pretty obvious to me that AOL's "features" are largely unused by, what 50, 75% of its "members."
posted by ParisParamus at 1:38 PM on May 22, 2001


Aren't the most popular parts of AOL instant messaging, e-mail, and the message boards? How much attention goes to AOL only content (is there even any left)?

ParisParamus wonders why no other company has tried to undercut AOL. I know that AT&T is offering their 7/7 plan. $7/month for Net access with $0.07/minute for long distance. I'm not sure how much Earthlink, Juno, or MSN are charging, but they're not making a profit on the access business yet.

It's pretty obvious that the ISP business isn't an cheap way toward profit. There are the initial costs of servers. Then there's the required customer support, increased bandwidth costs (if the customer base grows), and constant monitoring. AOL seems to have been the best company to figure out a way to make money from it.
posted by shackbar at 1:57 PM on May 22, 2001


Doesn't bug me a bit. I hope all their members leave the nest and venture out into the real web.
posted by Wicker at 2:23 PM on May 22, 2001


Wicker you dork from Hell. Get a real cause in life, loser.
posted by poodle at 12:17 AM on May 27, 2001


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