AOL Bows Broadband Plan

-By Catharine P. Taylor

The moment has finally arrived for America Online to prove that its new strategy focusing on bring-your-own-access broadband users will work. And, as in so many past initiatives at AOL Time Warner, Madonna figures prominently in the strategy.

Beginning this week, Dulles, Va.-based America Online will roll out a new, enhanced AOL Broadband service, which among other things will leverage AOL Time Warner content to entice at-home broadband users to pay AOL $14.95 per month in addition to fees to their broadband ISP. The featured artist on AOL during April will be Madonna, whose Maverick Records label is part of Warner Music. The pop icon will perform an exclusive concert as part of AOL's ongoing BroadBAND Rocks! concert series. AOL is also touting a trailer-heavy Entertainment Weekly/AOL summer movies guide for broadband customers

But the high-speed content offerings are by no means limited to the AOL Time Warner family. They will also include on-demand video from both sibling CNN and ABC News and a smorgasbord of other features.

So is AOL porting TV to the Web? No, said Jim Bankoff, the unit's executive vp/programming. "We are not trying to recreate a television on your computer screen," said Bankoff. Rather, AOL wants the service to offer true interactivity, leveraging such things as transactions, message boards and the ability to share content with other members, he said.

AOL Broadband is the centerpiece of AOL CEO Jon Miller's turnaround plan, outlined last December. According to AOL, 2.7 million of its U.S. membership of 26.5 million currently accesses the service through a high-speed connection. Further, broadband usage is skyrocketing, according to a December 2002 study by Nielsen/NetRatings (like Mediaweek, a unit of VNU). The study showed a 59 percent increase in at-home broadband usage domestically last year. Conversely, narrowband access -- AOL's bread-and-butter -- dropped by 10 percent.

AOL is offering incentives to goose broadband subscriptions, including 45-day free trials to new members and a temporary price break to current dial-up members. A company representative said the plan for marketing the new broadband service to advertisers would be finalized in about a month.