The recent announcement that AOL will begin focusing more attention on making content and services available to the general public (as opposed to members only) is a testament to the power of open networks over closed.
The problem that AOL has been facing is that it is still charging a bunch of people for access to services (mostly content). Meanwhile, the rest of the world has moved on to free ad-supported models (Yahoo, Google, MSN, etc.) This trend has only accelerated as AOL’s customers moved from dial-up to broadband. Bundling access with content can be compelling for some, but once they’re paying SBC or Comcast for access, the content bundle becomes less compelling in the face of all that free competition. In other words, the “walled garden” approach doesn’t work in an open distribution system.
While AOL’s response to this realization has been less than inspirational, it does demonstrate the power of this shift. AOL is literally gambling billions of dollars in steady cash flow in an effort to capture a potential revenue flow that they believe will be large enough to justify the risk. They think open market distribution of services and content is going to be a very big market indeed.
But what is also interesting is that AOL appears to be trying to leapfrog Yahoo et al with the focus on audio and video. Their description of a “Video Hub” as a TV Guide for the Web will be something to check out. It should be available on the 21st.