AOL Internet Subscriptions Still Bringing In Profit
If you were around for the dawn of the Internet age, you're familiar with AOL. The crackling dial-up connection, the weird chartrooms... the frustration that came every time a family member picked up the phone and made you start the process all over again.
And while for many of us the company seems to be a thing of the past, its profit margin is very much part of the present. According to Vox, around 2.3 million people continue to pay $20 each month for the AOL subscriptions.
The figure implies that well over half of one percent of the American public (0.718 percent) still pays AOL for Internet services.
It is surprising news to hear that the company continues to derive profit from their dial-up business, rather than their high-profile media properties like The Huffington Post, which it acquired back in 2011, and TechCrunch. But there are some folks out there who continue to seek out the company's traditional services. Those living in rural parts of the country without access to high-speed Internet continue to use their phone line as a way to connect.
Other subscribers, however, are not using the services. Millions of people who started paying the company a month fee for Internet access over a decade ago continue to pay up, even though they are not likely connecting to the Internet through AOL any longer.
The company has managed to keep its profits up by increasing prices even as subscriber numbers drop. Back in 2011, the company had just over 3 million people paying $18 a month. This quarter, they have just 2.34 million individuals paying just over $20 a month.
Tim Armstrong, the CEO and Chairman of AOL Inc., says its subscription business generated $143 million in "Adjusted OIBDA" last quarter - significantly more than the $121 million in Adjusted OIBDA that the entire company managed to bring in.
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