"1000 Free Hours" Does Not a Customer Make
Having given up on winning customers with good service long ago, it appears AOL's latest attempt to stave off impending doom is to eliminate free access to parts or all of certain AOL Time Warner sites. AOL subscribers, of course, would still have access to the sites. The rest of the Internet would, however, would have to subscribe to each individual site. Ostensibly, this would cost more than an AOL subscription.
Time Magazine's Web site would be the first to go dark with parts of Sport Illustrated, CNN and others to follow. Things like columns, editorials, exposes, etc. are more likely to get targeted while breaking news would probably still be available for free to non-AOL customers.
Wall Street, of course, loves the idea. This is the "synergy" investors were expecting at the time of the AOL Time Warner merger. If this works, then you can expect others to follow suit. Most notable, the biggest competitor to the AOL Time Warner megalo-media corporation is the Microsoft/MSN/NBC/Comcast/AT&T Broadband alliance. One might expect them to take a similar approach.
Though we are loath to admit it and we are at a loss to explain it, AOL has a massive subscriber base. Therefore, it is possible they could pull this off where others (including Time Magazine itself) have failed in the past. Does anyone remember PathFinder? You shouldn't. :)
For AOL, this is almost a necessity as they've reduced their programming staff to a mere 100 people. 100 people are expected to provide content for over 33 million subscribers. Partly as a result of this, AOL is losing upwards of 7 million customers a year. With a customer burn rate like that, it may not be long until Time has to switch back to the free content model.