AOL Invests Heavily in Online Video

01 August 2006

AOL, currently struggling to reverse its decline, will this week launch a massively expanded online video service in an effort to attract new audiences to replace revenues from its rapidly declining subscription service.

The new venture, which begins a public pilot scheme on Friday, adds a range of new free programs. And in a first-time initiative it will sell commercial-free video downloads, competing with Apple's iTunes Music Store and Google Video.

At the outset, AOL won't offer programs from the four main broadcast networks, although this could follow. Initially it will vend downloads from other large programmers, among them MTV Networks, A&E Networks and Warner Brothers.

AOL's free-to-view content will include movies from its sibling TNT network, stand-up routines from Comedy Time and classic soap operas like Another World sponsored by Procter & Gamble.

AOL evp Kevin C Conroy says the company's research shows that users want a mix of free and paid programming: "Consumers said loud and clear, 'I don't understand why I have to go one place to watch stuff with ads and another place for download-to-own stuff. Can't someone provide me with all my choices in one place?' "

On Wednesday AOL parent Time Warner is due to announce a radical restructuring of of the internet portal.

Data sourced from New York Times; additional content by WARC staff