Timesonline recently reported that Time Warner is likely to provide free AOL services to high speed internet users therefore reversing its subscription policy in order to move on to online advertising revenue.
Further, it is reported that Time Warner has decided to offer its e-mail and AIM instant messaging programs including software and internet services free of charge to the broadband users in U.S. while exactly this model is likely to be implemented in Europe somewhere next year.
It may be highly risky business for Time Warner to shift its revenue model as at present it accrues around 80 percent revenue from the subscription, a sudden shift of focus may dampen its incoming revenue at least in short term.
Another angle which is important to be noticed that the membership resting with AOL had peaked in the year 2002 as it recorded a whopping membership of 26.7 million and now it has dropped to 18.6 million. So there is a clear loss of revenue is visible and the analyst sitting at Time Warner may be thinking of a further drop of membership.
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Struggling with subscription revenues, AOL changes advertising strategy
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