AOL Goes Flat!

By Michael Webb, Publisher and Editor-in-Chief, 103165.3700@compuserve.com

The latest wrinkle in the Online War is an almost shocking one.

You may have gathered from the title of this article that America Online had gone out of business, but that is very much not the case. In fact, what they have done will probably go a long way towards guaranteeing that they stay in business for some time to come.

Mass number of Internet Service Providers (ISP's) have sprung up in recent times, generally offering users a flat rate/unlimited usage account for internet access. There's no doubt the Online Services, proponents of the hourly-charge philosophy, have been feeling the crunch. CompuServe's answer was to launch WOW!, basically a new online service with flat rate access, earlier this year. They kept the classic CompuServe network on the not-so-flat rate, however.

Not to be outdone by the seemingly parasitic ISP's, or by it's biggest competitor (CIS), online service provider giant America Online made a bold move recently, putting all its members on a $19.95/month unlimited access flat rate. They now offer their entire proprietary network, as well as the internet, to its 6 million or so subscribers, all for one simple rate.

Some subscribers are overjoyed about this change, whereas others use the network so little that the older, less expensive several-free-hours-followed-by-an-hourly-rate makes more sense to them. Both plans are available, incidentally; but some subscribers were annoyed that they had to expressly inform AOL if they didn't want to be put on the new plan.

• ...America Online? Some people would assume that this new rate would hurt AOL, but I seriously doubt it. Keep in mind that they have just basically doubled their income from $9.95/person to $19.95/person. There were, of course, those who racked up huge bills of several thousand dollars per month, but these were clearly in the minority. This will at least stem the flood of members abandoning AOL, and I suspect their membership (or the rate of increase thereof) will increase. I personally believe this is a winning move by AOL.
• ...AOL members? Anybody who got any substantial amount of use out of AOL will probably be quite pleased with this, if they can stomach the factor-of-two price increase. This will probably make AOL members in general much more likely to stay with the service.
• ...Members of other online services? Many people who currently use other online services are probably going to have to think long and hard about their membership. I know from personal experience that having to keep an eye glued to the time clock while using CompuServe is very frustrating and annoying, and that I have developed the mentality of "the less use, the better." I suspect many other people feel the same way.
• ...Other online services? If I were them, I would worry, frankly. AOL is as big, and offers nearly as many resources as any of them, and now people are going to feel a lot more freedom in online usage. As for CompuServe, specifically, I sent a message directly to customer service asking if they had any intention of responding to AOL's maneuver. The answer was no, there is currently no known intention of CIS doing so, and that apparently they think WOW! is enough. We shall see. Will this reporter be leaving CIS in favor of AOL? Not in the immediate future; I have several reasons for staying with CompuServe. CIS should be very thankful for those reasons.
• ...Members of ISP's? I don't foresee many ISP users dropping their accounts in favor of AOL. Some may supplement them with an AOL membership; but in general, once people reach the internet, they seem somewhat unlikely to go back to an online service. I don't pretend to know all the answers, though, so it should be interesting to see just what occurs in the near future.
  And last but clearly not least...
• ...Amiga users? Remember those reasons I mentioned above? Well, here's one of them. America Online, in all its vastness, does not have an Amiga Forum, and there is no version of the proprietary software used to access AOL for the Amiga. Unlike with, for example, CompuServe, the AOL software is the only way to access it. No ASCII...not that Amiga users would be thrilled with joining yet another effective ASCII-only Online Service, anyway. Amiga users can access the internet through AOL as well as with any other service, however, so it depends on what you need to do. If you are looking for mostly internet access, AOL should seem like any other ISP, and you could use a PC or Mac (even with ShapeShifter) to access the AOL network on those rare occasions when you would want to. For those more proprietary network-oriented without PC's or Macs, it's much harder to say. It comes down to what you need/want to do online. If you have a good setup between your Amiga and an ISP, you should probably stick with it. As long as CompuServe has Amiga Forums and AOL doesn't, CIS members might consider staying put. But if you can make use of AOL's facilities, and also would like internet access, the new flat rate is a very attractive offer.

This should probably go under the category of "significant events." It's hard to tell exactly what the results of AOL's pricing change will be, but it should be a very interesting story to follow.