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AOL spent over $300 million sending out those subscriber discs in the 90s

Techcrunch had a very interesting article today about those annoying AOL installation discs that every American received in the mail, usually once per month.

On the popular Q&A site Quora, the question was recently asked: "How much did it cost AOL to distribute all those CDs back in the 1990′s?"



Former AOL CEO Steve Case joined the site to answer the question, responding:

A lot. As we were able to lower the cost of disks/trial/etc we were able to ramp up marketing. (Plus, we knew Microsoft was coming and it was never going to be easier or cheaper to get market share.) When we went public in 1992 we had less than 200,000 subscribers; a decade later the number was in the 25 million range.

Case noted that the goal of AOL was to spend 10 percent of lifetime revenue on acquiring a new subscriber, and because average subscriber life was 25 months, the company likely spent $35 per user (on discs, other marketing.)

Jan Brandt, AOL’s former CMO, gave more specific numbers:

Over $300 million :-) At one point, 50% of the CD’s produced worldwide had an AOL logo on it. We were logging in new subscribers at the rate of one every six seconds.

Written by: Andre Yoskowitz @ 27 Dec 2010 23:46

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• 8 comments

• KillerBug

  So...15 grams per disk...
  $300 million spent on disks, at around $0.50 each (including shipping & packaging)
  
  That is 19,841,400LBS of plastic in land fills, not counting the packaging...all from a single marketing campaign.
  
  Quote:Case noted that the goal of AOL was to spend 10 percent of lifetime revenue on acquiring a new subscriber, and because average subscriber life was 25 months, the company likely spent $35 per user (on discs, other marketing.) I guess that explains why they try so hard to get rid of customers...if they stay around too long the average would go up...before long AOL would have to start sending hundreds of dollars worth of garbage to everyone on earth.
  

  28.12.2010 00:15 #1

• xboxdvl2

  Originally posted by KillerBug: So...15 grams per disk...
  $300 million spent on disks, at around $0.50 each (including shipping & packaging)
  
  That is 19,841,400LBS of plastic in land fills, not counting the packaging...all from a single marketing campaign.
  
  Quote:Case noted that the goal of AOL was to spend 10 percent of lifetime revenue on acquiring a new subscriber, and because average subscriber life was 25 months, the company likely spent $35 per user (on discs, other marketing.) I guess that explains why they try so hard to get rid of customers...if they stay around too long the average would go up...before long AOL would have to start sending hundreds of dollars worth of garbage to everyone on earth. actually i think that would be 19,841,400 LBS of recyclable material.the way things are millions of people waste things and polute the earth try not to worry about.
  

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  pc-windows 7,intel core quad Q8400,4 Gb ddr2,WD 500 GB hdd,ATI Radeon HD 4550 graphics,AOC 22inch LCD moniter.

  28.12.2010 03:24 #2

• NHS2008

  dude....I live in India and I could see pile of AOL marked disks in streetside shops in 90s..mostly purchased by poor people to hang/stick on their bicycles/cars! I feel nostalgic!
  

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  28.12.2010 06:23 #3

• dEwMe

  Originally posted by NHS2008: dude....I live in India and I could see pile of AOL marked disks in streetside shops in 90s..mostly purchased by poor people to hang/stick on their bicycles/cars! I feel nostalgic! LOL...Yeah a relative of mine fgured out how to make cool reflecters for his christmas lights with em...I used to throw a piece of tape on the diskettes and reuse them. AOL itself was always a joke...no better way to say you had no clue about the net than to say you were on AOL!
  
  

  Just my $0.02,
  
  dEwMe
  

  28.12.2010 12:08 #4

• pudly1

  AOL? Absolutely Obsolete Loonies?

  28.12.2010 13:23 #5

• Blackjax

  $300 mill, 285 of it in coasters for end tables.

  28.12.2010 19:34 #6

• KillerBug

  Originally posted by pudly1: AOL? Absolutely Obsolete Loonies? America Off-Line.
  
  They made terrible coasters; there was a hole in the middle, and you had to use them shiny-side-up to avoid seeing that terrible logo.
  

  28.12.2010 23:10 #7

• lawndog

  Well even though I, like most others, cant stand AOL. They accomplished their goal of suckering, I mean getting new custumers hard and fast.
  Seems like they gave it to the custumers hard and fast to, and didn't even buy them diner or use............ well never mind that part, but they really screwed their custumers
  

  29.12.2010 05:26 #8