60% of AOL’s Profits Come From People Who Don’t Know That Email Is Free

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Get ready to haz a sad: Ken Auletta of The New Yorker revealed in an article profiling AOL that the company makes 60 percent of its profits through people, mostly elderly people, who believe they need to pay for a monthly subscription to go online and check their email. Is this a scam, or just a case of witholding information — or in this case, lying?

If you remember when the Internet was just becoming a mainstream commodity, you’ll recall getting CD-ROMs in the mail offering free AOL services. Because way back when, before DSL and broadband Internet, there was dial-up, and the only way to get online was to subscribe to a service like AOL, Earthlink, etc. And this would cost up to about $20 a month. Clearly this is not the case now, and you can have an AOL account for the low, low price of $0. While there are still paid services available from AOL, Auletta believes that this is not what the customers to whom he refers are paying for.

The company still gets eighty percent of its profits from subscribers, many of whom are older people who have cable or DSL service but don’t realize that they need not pay an additional twenty-five dollars a month to get online and check their e-mail. “The dirty little secret,” a former AOL executive says, “is that seventy-five percent of the people who subscribe to AOL’s dial-up service don’t need it.”

So, is AOL scamming the elderly and computer illiterate? Probably not, but they’re certainly not giving them the information they need. It’s pretty clear that signing up for their basic services is free, and there is no reason for people to pay AOL $20 a month to go on the Internet when they already have DSL or broadband. AOL has been experiencing a big dropoff in subscriptions since there are so many other free, web-based email services, but this practice of staying hush-hush because some of their customers don’t know they’re paying for a free service is shady at best. In fact, it’s pretty dirty. And predatory. It’s not a scam, but it is unethical.

Business Insider, who does believe it’s a scam, has information that can be passed on to those who need to inform the AOL users they know and love that they no longer need to pay a monthly fee for their email.

(Huffington Post via Slashdot)


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