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America Online’s dial-up division may need a tourniquet rather than a band-aid. The Dulles, Va.-based internet service provider (ISP) has bled more than 1 million of its 26 million total dial-up customers since the end of last year, a higher number than many analysts had predicted. Discount ISPs and a preference for cable broadband are largely to blame, accounting for more than half the lost customers. AOL charges $23.90 per month for dial-up. The cut-rate ISPs charge less than half that; one, United Online, has reported a 50 percent annual growth rate for subscribers. Plus, the AOL brand name has gotten plenty of bad publicity in the past 12 months what with a federal investigation into accounting practices and free-falling stock prices. That may mean more layoffs at AOL. The company already has gone through several rounds since last summer. AOL expected some loss of dial-up customers after the fourth quarter, when the company showed its first-ever dip in that arena. But the company’s chief financial officer, Wayne H. Pace, said this week that 1 million was much more than anticipated.
Colleges and industry agree on webcast fees
The music industry has reached a royalty payment agreement with college radio stations that will allow them to webcast music for a mutually acceptable price. The discussions had been ongoing for years and resulted in a slight discount for college stations compared to regular noncommercial internet streamers. Educational webcasters long complained that charging them the same fee as other noncommercial ones would effectively bankrupt the college operations. A flat fee of $250, $150 cheaper than the general noncommercial price, will apply to educational broadcasters and will be retroactive to 1998. Small commercial webcasters pay $500 per year. The fee may go up (with more channels or a bigger listening audience) or down (if content is merely sports or news) according to the stations’ formats.
Study: Bigger the online ad, better the response
Bigger is better on the internet. A new cross-media optimization study (XMOS) from the Interactive Advertising Bureau found that when it comes to online advertising, larger ads are more effective ads. The study compared the results of various on- and offline campaigns promoting McDonald’s Grilled Chicken Flatbread Sandwich. Thirty-second TV commercials, superstitials, or transitional ads, banners, skyscrapers, rectangles and boxes were all tested. The XMOS found that superstitials generated the largest lift in awareness among consumers. Out of four brand attributes -- new, different, exciting and combination of great flavors -- “exciting” performed best in the transitional format, outdoing even TV in terms of awareness.
Sorenstam drives traffic increase to PGA site
Annika Sorenstam didn’t make the cut, but she did make a huge impact on the web. When the top-ranked LPGA golfer played at the PGA’s Bank of America Colonial tournament two weeks ago, she really goosed traffic to the PGA Tour site, Nielsen//NetRatings reports. The number of at-home surfers to the site that week jumped by 101 percent to 369,000, compared with 184,000 the previous week. The number of at-work users increased by 70 percent, going from 398,000 to 677,000. Seventy percent of the PGA Tour site traffic in that span went to the PGA Tour Leaderboard, which has real time scoring. Sorenstam’s scorecard was accessed by 38 percent of surfers, nearly four times the amount of second-most-popular Phil Mickelson’s.
Harry Potter author set for post-book MSN chat
Harry Potter mania will get a new dimension the week after the long-anticipated fifth book in the series is released. Author J.K. Rowling will appear worldwide off a live internet feed from Microsoft’s MSN on June 26. She’ll read from “Harry Potter and the Order of the Phoenix” before answering young fans’ questions at London’s Royal Albert Hall. MSN has begun soliciting questions from the 34 countries that will have access to the webcast. “Phoenix” will be released June 21. Amazon.com reported this week that pre-sales of the 800-page novel have eclipsed 1 million. The book already had become the site’s all-time bestseller.
June 5, 2003© 2003 Media Life
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