Dulles-based AOL and Intel Corp. launched an online video-on-demand service Monday that will allow consumers to download movies, television shows, music videos and sports programs to their television sets. The partnership is part of AOL’s overall strategy to bring in alternative revenues in the face of a declining subscriber base.
“This is a very good move for AOL,” Bob Egan, director of emerging technologies with the Massachussetts-based research firm TowerGroup, told The Examiner. “It’s one of a number of puzzle pieces that AOL needs to put together to re-engineer itself.”
The service lets users search with a TV remote control for videos available from AOL’s library, which includes 45 channels of television shows, movies and millions of additional videos, said Kevin Conroy, executive vice president at AOL. Users can download the content to Intel computers with patented Viiv technology and then transfer the files to their television.
The partnership puts AOL in a position to compete in the rapidly growing video-on-demand market, Egan said. By launching the service, the struggling company continues its transition from a subscriber- and advertiser-based business model to a services-based one.
“Video on demand hasn’t even achieved a tipping point,” Egan said. “Its future is going to be very big. [AOL’s service] is in line with some of the very big trends we’re seeing on the Internet.”
Earlier this year, AOL announced customers would no longer have to pay for an AOL e-mail account. The company had already lost much of its subscriber base to free e-mail services, forcing the company to focus on new avenues of revenue.
“The Internet has truly changed the way consumers enjoy a wide variety of content,” said Kevin Conroy, executive vice president of AOL. “They want to experience it anytime, anywhere, on demand.”
Intel Chief Executive Officer Paul Otellini and his counterpart at AOL, Jonathan Miller, first demonstrated the new service at the Consumer Electronics Show in Las Vegas in January. Otellini and others in the industry havebeen wooing studio and network heads, trying to convince them downloadable digital content will eventually replace home entertainment devices.
Bloomberg contributed to this report.
