AOL uploads H'w'd glitz
Company looks to revitialize brand with 8.0 launch
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Drawing a conspicuously blurry line between a software upgrade and a glitzy Hollywood premiere party was exactly what the lords of AOL TW probably had in mind as the company sought to rejuvenate its brand and get back to its customer service roots.
"Success can be its own undoing," CEO Richard Parsons told the largely partisan, boisterous gathering. "We've gotten back to the basics -- giving you what you originally wanted."
And what those 35 million worldwide AOL users evidently wanted was no pop-up ads and an end to spam emails.
With that, Parsons introduced Turner, who whipped the crowd into a pre-game frenzy with some harmless Microsoft-bashing.
"Watch out, Bill Gates and Microsoft, here we come," Turner proclaimed, in defiant reference to the software giant's spoiler announcement of its own MSN upgrade due out next week.
"AOL Rocks, Microsoft Bites," rallied Dana Carvey, the host of the extravaganza.
Spirited potshots aside, "AOL Live @ Avery Fisher Hall" was clear evidence that the embattled media conglom may finally have found the missing link between tech and entertainment. The launch highlighted AOL's new "First Look" features with a "Harry Potter and the Chamber of Secrets" trailer and upcoming clips of "The Sopranos."
A jovial and casual chairman Steve Case (notably minus a tie) seemed unusually at ease, in a double act with Carvey. Touting 8.0 as "the best AOL ever," Case was in his element as he described new 8.0 features such as Match Chat (a search guide to hundreds of AOL chat rooms) and spam-blocking features, and differentiated himself from self-described "suit" Parsons.
Serious business
There were,of course, some serious business issues sprinkled into the carefully orchestrated fairy dust.
AOL's new CEO Jon Miller confirmed AOL will phase out all third-party pop-up ads on the service by the end of the year, potentially jeopardizing some $30 million in annual sales.
Miller told Daily Variety he intends to make up that revenue by providing advertisers with better and more relevant "contextual advertising." Miller wouldn't comment on speculation that AOL will miss its quarterly estimates when it announces its results later this month, but said he was optimistic that next year's newly defined advertising dollars will show growth over this year.
"We felt it was better to do the right thing by our users and improve the value for advertisers," Miller said after the festivities. "We will work through our existing commitments and users will start to see a difference by year end.
Nor would Miller be drawn into describing more detailed plans for premium entertainment downloads on its broadband service, but promised specific ideas for increasing premium subscriber revenues were in the pipeline. The pop-ups will be used solely for AOL to "talk to its audience." Miller also hinted he will be moving AOL to expand its existing partnerships with its AOL commerce and entertainment tenants, including additional opportunities for e-commerce.
Focus on strategy
As for pending cutbacks, Miller emphasized he's focused first on creating the right strategy, and only after the smoke clears would he contemplate exactly how and if to make trims. Not surprisingly, the strategy for both AOL domestic, broadband and international is getting on a fast path to profitability.
While the company is being cautious in ramping up its new online music service, it clearly has big ideas for broadband as its core dialup audience migrates to high-speed. The company's eighth edition will feature more than 100 "consumer-centric enhancements" for broadband users, including a video-enhanced welcome screen, and more exclusive content programming that will dovetail with popular Time Warner TV and film brands.
"Our strategy is unique and reflective of the media business. … We need to build a viewing habit. People respond to predictable entertainment delivery," said AOL Entertainment group senior VP/G.M. Kevin Conroy.
He said his group is focusing on windowing content to complement its existing TV, film and music releases. Keeping Warner products exclusive will be less important than being able to offer regular premieres of music or other content, said Conroy, who added AOL will be reaching out and partnering with more third-party movie and music producers to feature their wares to a wide and predictable audience.
Conroy said building a regular audience through planned music and movie and game premieres (First Look, First View, First Listen and First Play) eventually will transition into full-scale media delivery and commerce in the broadband environment.
