How to revive AOL
Friday, December 6, 2002 by Dave Winer.
After merging with Time-Warner, AOL seems to have lost its way. Earlier this week in New York, AOL execs met with analysts to explain their post-merger strategy. Where we hoped for something bold, interesting, synergistic, we got something vague that's hard to believe in.
On Scripting News, on Wednesday, I played what if. What if I were Steve Case, and I had the support of the AOL-Time-Warner board to do something bold and innovative to challenge ourselves and our competitors, to get the users excited about logging on again. I didn't have to dig too hard to come up with the answer, and it got a strong response from my readers. Everyone seems to have liked the idea. In my dream here's what Steve Case would have said on Tuesday in NY.
"Hi my name is Steve Case. Remember me? I work for AOL-Time-Warner. We own a lot of music companies. I was talking with my friend and colleague Ted Turner, while we were trying to figure out what to do with our online system, and he told me the story of how he bought MGM to establish Turner Classic Movies, and what a hit that channel is with cable subscribers. I asked Ted if we couldn't do the same thing for music with AOL. After all the people really seemed to like Napster. Why not give them what they want?
"So today we're opening up the vaults of Time-Warner music, all kinds of great acts, for only $19.95 per month, for AOL subscribers only. A new version of the client software, version 8.1 will be available shortly with the new Music Manager app built-in, based on work done by the WinAmp folks. Guess what, it plays MP3s! We've done really clean scans of all the classics from Billy Joel to Boy George.
"Welcome back to innovation and staying in tune with customers at AOL. And welcome to the world of convergence, where synergy is more than just lip movement, where we put weight behind the big ideas of our time."
Wouldn't that be wonderful?
It's been two years since the summer of 2000, when Napster was the rage and ordinary people were talking about music in supermarkets and airports. We're still waiting for the killer app that only AOL can produce. They must have thought of it, but in its weakened state, AOL must not be able to persuade the entertainment companies inside AOL-Time-Warner to risk some of their archives on an experiment. But those archives aren't generating revenue, just as the MGM movie archive wasn't making money for the owners of MGM (they had positioned it as a hotel company) when Turner made his offer.
Turner Classic Movies is a great blueprint for the music business they could build out of AOL. The fans know what they want. We understand that we can't have Napster in all its glory. We understand that we have to pay for the music we use. It's too bad that AOL didn't jump on this as soon as the merger with Time-Warner was complete. But it's still not too late. Done right, a plan to distribute music in MP3 format, over the Internet, in conjunction with hardware vendors like Apple, would be a huge moneymaker, and would give AOL continued relevance.
It's still an exciting idea, if they decided to do it, I'd work for them for $1 per year to see it through. In my humble opinion, the logjam over music on the Internet is a big reason that growth is so elusive today in the tech industry.