America Online Inc’s European arm has finally succumbed to the pressure of the subscription-free net access market in the UK and has said it will launch a Nescape-branded copycat service mid-August. The PR spin from AOL UK, which lost its market dominance with the arrival of Freeserve last September, says that Nescape Online will try to capture the newly-emerging ‘value’ market segment.
AOL wants a piece of the largest slice of the ISP pie – young, largely male, net-savvy individuals who can aggregate their own content, and lower income net-curious families. These are the people that have given Freeserve a 31% market-share compared to AOL’s 9% over the past six months. The firm doesn’t think its core audience that pay 10 pounds ($15.6) per month for its premium AOL service will migrate, but it is inconceivable that at least a small portion will not.
Although details of the service are not yet available, it is likely to be a cut-down version of the AOL service, with less content, although teasers from the fee-paying site are likely. Connection speeds and service availability will be the key issues for the type of consumer AOL is hoping to attract.
The launch of the service casts doubt over the viability of subscription-based toll-free internet access, which AOL is known to be piloting. UK net users still pay for their phone calls on a per-minute basis, which is where Netscape Online will recoup its costs, but AOL believes that a US-style unmetered model is the only way to get the nation online. It recently sent out around 60,000 trial CDs to subscribers, offering various levels of service, from 14.99 pounds to 29.99 pounds ($23-$47) per month for 24/7 access via a toll-free 0800 number. It is also lobbying European governments and regulators to have a US-style telephony billing model installed, and has joined the Campaign for Unmetered Telecommunications.
