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:
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:
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.
