America Online ponders tacking on extra charges Exclusive services seen as income source

Telecommunications

December 25, 1996|By BLOOMBERG BUSINESS NEWS

DULLES, Va. -- America Online Inc. said yesterday that it is considering charging extra fees for certain exclusive services such as games, as the No. 1 online service looks for ways to bolster revenue.

The company declined to comment on how much extra it would charge.

AOL this month introduced a $19.95 flat fee for unlimited monthly use to compete with rivals including Microsoft Corp.'s online service and AT&T Corp.'s Internet-access service.

That means AOL must rely more on other revenue sources, such as advertising, electronic transactions, and possibly premium services.

"Offering something that is unique and different could be translated into being able to charge money," said David Gang, AOL's vice president of product marketing.

AOL has said it plans to cut a large number of its publishers as it seeks to offer exclusive entertainment, news and electronic discussions to keep subscribers from defecting to Microsoft Network or AT&T WorldNet, which charge identical fees.

America Online also is considering creating specific areas, such as an amusement park that offers games, to persuade customers to pay an extra fee, Gang said.

Another revenue option is to publish certain information on the Internet that's accessible to AOL subscribers and others, who would pay a separate charge to access that information, said Abhishek Gami, an analyst at Nesbitt Burns.

"AOL is talking about tiered pricing for channels of content," Gami said. "Customers could just subscribe to the pieces of AOL they want."

AOL's shares fell 50 cents to $36.375 yesterday.

Pub Date: 12/25/96

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