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AOL To Embrace Ad Supported Model For More Content

In a world there is an abundance of free media Internet, radio, broadcast TV, we’ve often wondered if subscription based consumer services can survive.  Can is be a good business model to ask people to put another $5, $10, or $15 on their credit cards every month?

AOL for example is feeling the erosion of customers to other broadband services usually bundled with an existing cable or telephone service. So they’ve decided to fight back.

The Hollywood Reports writes this morning that, "in a move both risky and essential, AOL is abandoning its strategy of exclusivity and will free much of its music, sports and other programming to non-subscribers in hopes of boosting ad sales. The decision could help the company counter declining subscriptions as Internet users move to high-speed connections. At least that’s the plan. The danger is that the bold new strategy will instead accelerate the erosion of AOL’s core revenue source. To begin with, the change pits AOL against big guns Yahoo Inc. and Microsoft Corp., which in turn are looking over their shoulder wondering what search leader Google Inc. will do next."

"AOL is left looking like the race car in a race that nobody wants to run in anymore," said Rob Enderle, an industry analyst in San Jose, Calif. "AOL’s dead as it exists. It has to find a way to become relevant again."

Ouch !

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