AOL Dialup Dashboard: Hanging In There With 2.8 Million Subscribers

AOL reported its fourth quarter 2012 results today, posting its first growth in 8 years (!). Below, an updated version of my decade-of-AOL-dialup chart, a new look at how AOL (sorta) makes money, and one of my favorites, the AOL vs. Netflix decade of moving in opposite directions.

First, the big picture for AOL dialup: Continued, albeit slower decline. At the end of 2012, AOL had 2.8 million subscribers, down almost half a million from 2011. But it only lost about 100,000 subscribers from the end of September, a lower-than-average drop.

AOL also reported how its different business segments contribute to its sales and profits.

The story forever has been that AOL’s dying dialup business directly generates most of its profits and indirectly, its biggest chunk of revenue. Subscriptions themselves are just 29% of AOL’s sales. But the newly reported “Membership Group” — including AIM, AOL Mail, search revenue from AOL subscribers, etc. — generates the biggest chunk of sales and more than all of its profits. (That is, the segment itself is more profitable than AOL as a whole.)

Meanwhile, AOL’s “Brand Group” — AOL.com, HuffPost, Patch, Engadget, TechCrunch, etc.; the future of the company — generates almost as much revenue but almost zero profit.

Summary: AOL still relies too much on its “old” business. But at least it still has it.

Lastly, an updated version of one of my favorites. It’s hard to find two companies that better represent the old and new Internet eras than AOL and Netflix. Both are primarily subscription-based companies, both looking for about $10-20 per month from you. And as you can see, their popularity is almost exactly the opposite of each other.

This makes perfect sense, of course. AOL represents dialup, and Netflix broadband. You’d generally only want one or the other — not both.