AOLTV: The End of Bliss?

By definition, couch potatoes dislike getting active, and they may be even less inclined to get interactive.

When the idea of accessing the Internet through a television set initially floated into public consciousness, it stirred quite a bit of excitement. But the killer Web convergence technology that allows TV viewers to actually — well, do things — is perhaps a little too exciting for an essentially passive medium.

A handful of Interactive TV companies have already tried to get people to combine their television viewing and online time, and those efforts have been met with underwhelming enthusiasm. Now America Online is getting into the game with the high-profile rollout last week of its much-ballyhooed AOLTV service in Phoenix, Arizona; Sacramento, California; and Baltimore, Maryland.

AOL is hoping that its built-in advantages over its predecessors in the interactivity game — namely a massive customer base and a reputation for being the easiest route to the Internet — will pay dividends.

Content, Interactivity Feast

Using a Philips Electronics set-top box, AOLTV also features the Internet service’s wide-ranging content partners, like Oxygen Media; E! Entertainment Television; and the Weather Channel. Members can get the service for $14.95 a month — non-members will pay $24.95 (US$).

Add in the goodies that the AOL/Time-Warner deal can bring to the table — an awesome collection of digital magazines, movies and news outlets — and it is easy to understand why AOL thinks it can win.

But I get the sense that there is going to be plenty of consumer resistance to AOL’s offering. There are no signs, yet, that the TV-viewing public is hungry for the technological improvements that will allow them to explore the Web’s myriad content and service offerings during prime time. When most people kick back in front of the living room set, they want to give their brains, as well as their bodies, a rest.

The Convergence Locomotive

No one doubts that convergence of the major media is well underway. The AOL/Time-Warner merger is just one small ripple in the status quo. But the process of bringing everything together is not a simple one, despite the fact that technologically, it seems to be a done deal.

There is no lack of will among industry players to kick convergence into high gear. Many e-tailers salivate at the mere thought of customers impulsively clicking the “buy” buttons on their remote controls when lured by clever product advertisements on TV shows that bring the Jim Carrey film “The Truman Show” to mind.

Lately, television networks themselves have pushed hard on the interactive envelope. The most popular shows on TV, such as “Who Wants To Be a Millionaire?” and “Survivor” frequently refer viewers to their counterpart Web sites to play along.

Resistance to Movement

The problem is that even though they are often the same people in different modes, computer users and TV viewers typically inhabit different rooms in the house, and are passionately determined to keep them as separate as church and state. AOL’s own research points out that although the number of people who go online with the TV playing in the background is up, it is still relatively small.

Forrester Research noted last week that WebTV subscriptions reached 1.1 million fairly quickly and then slowed to a crawl. Forrester analyst Josh Bernoff believes that AOL will have to lower its monthly price to $5 in order to attract a sizeable number of subscribers.

Marshmallow Landing

So AOLTV will probably not make a huge splash in the beginning. But improvements in technology are sure to change the landscape in the long view. In another 10 years, when High Definition TV (HDTV) has a much stronger foothold in the market, moving Internet activities from the small computer monitor to the vividly colored big TV screen may seem worthwhile.

Cable and satellite providers are already forming partnerships that will result in content-interactivity operations as wide ranging as AOL’s, if not more so. In another decade, the Internet will have completely infused our lives in ways we can only imagine now — and all sorts of interactive offerings, including the AOL model, may end up being good bets.

Not Quite There

But in the short term, AOLTV is likely to be greeted by a massive, collective shrug and yawn. For the Internet’s biggest company, it may be worthwhile to lay the groundwork for future interactive connectivity. But AOL’s off timing could disturb the rhythm of the Internet itself.

With consumers feeling pulled in too many directions, there may be a tendency for some to drop out of the entire scene. It might be better if the technology wizards were to give the people they serve a little more time to gradually embrace the convergence vision.

Heat the Iron

Or perhaps AOL should jump into the arena with both feet instead of pussyfooting around. Instead of simply putting a better mousetrap on the shelf, perhaps AOL should strike a bold chord to change the consumer mindset — to break down the long-standing habit of surfing here and vegging-out there.

Does AOL have what it takes to make AOLTV absolutely irresistible? To break through consumer ennui, it must become a must-have item — like the cell phone, or the VCR, or indoor plumbing.

And Strike

One of the best ways to motivate consumers to buy something is to sell it to their neighbors first. AOL should drop the price of the service so far that consumers just can’t say no. The $5.95 a month figure that Forrester mentions sounds good.

Think of it. Nothing — not phone service, not cable TV, not even a daily newspaper — costs so little. Parents could reward their AOL-crazed, Instant Messenger-addled teenagers with subscriptions of their own, sparking a Gen Y buying frenzy.

Would AOL’s top line take a hit? Of course. With its merger trudging forward and the high-tech world on shaky ground, the company would be taking a huge risk. But with the creation of must-have AOLTV, the company could drive customers to its core online service businesses and open millions of new eyes to its content properties.

AOL has already acknowledged that it wants to be at the leading edge of the convergence movement. Instead of dipping a toe in the interactive TV waters and waiting for technology and time to nurture the movement, AOL can make some waves of its own. If the price is right, the formerly reluctant consumer may jump with barely a glance at what lies below.

Less May Be More

Or not. Perhaps AOL — and all the other interactive TV dreamers — are on a hopeless mission. Who’s to say?

After all, anything that threatens to diminish the pleasure of sinking into a thick, tufted sofa and letting the world drift away may not be progress.

What do you think? Let’s talk about it.

3 Comments

  • ok i have webtv plus settop and the aoltv settop…they both need improvements…webtv has been taken over by msn…not fun….no chat options…no profiles….no respect and a guest tag while chatting…aoltv u can’t turn off the tv…i hate that…and u can’t take snapshots with it….but i think i have the solution for that..more on the solution later….and they do need to make it cheaper…msntv and aoltv…why pay the same price if i’m not getting the same service…? people ask…why don’t you just get a computer…? my answer is…why should i pay over 500 bucks just to chat…i’m not downloading anything….fix those few problems and good advertising….and you will have a seller…

  • Hiya Keith,
    This past Christmas we dragged our elderly parents into the www by making them a present of AOL_TV. They are/were totally computer illiterate. We originally planned to get them one of those email station things. But once we started looking around, we ran across AOL-TV and just thought it a much better idea- email and the ability to surf the net all in one. Anyway, we gave it to them for Christmas and they love it. AOL-TV is the perfect product for them.
    I do have a question- possibly you would have information that could help answer it.
    What are the implications of all of the recent turmoil at AOL/Time Warner for AOL-TV’s future? Is it an unprofitable subdivision that might get spun off or shut down? My folks are worried! 🙂
    Thanks,
    Chris Westervelt

  • How does this compare to Web TV?

    My mother refuses to touch a computer but is interested in Web TV. (I know a computer is better but she refuses to try it.)

    I want to get her Web TV etc for Christmas. Is this equivalent to Web TV or better or not as good?

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