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New mathematics shows that 1+1=3

Fri, 11/30/2001 - 7:00pm
Matt Stump of Broadband Week

Google Factor: 83,300

Yes, AOL Time Warner is one of the world's largest media companies and yes, it's also a shining example of the marriage of old media and new media. But it makes CED's Broadband 50 because the company's content and technology tentacles reach into so many areas, present and future, that it stands to be a major broadband player for years to come.

Those assets start with more than 30 million AOL online subscribers, nearly 13 million cable subscribers, more than 2.8 million digital subscribers and 1.5 million data subscribers, the largest installed base of cable modem subscribers on the planet.

The visionaries behind the combined company are a curious mix of the buttoned-down, philosophical Gerry Levin, the Hawaiian Internet genius Steve Case and the MTV programming boy wonder and now king of cross-division synergy Bob Pittman, who's waiting in the wings to someday succeed Levin.

From the top of the corporate ladder, AOL enunciates a content + technology strategy, where 1 + 1 = 3 when broadband strategies are included.

AOL's Anywhere strategy extends beyond the PC to Explorer 2000 set-tops, via AOLTV, AOL Broadband on high-speed access lines and AOL on mobile devices. Associated with AOL's Anywhere strategy is Pittman's home networking vision. He often returns to that theme when speaking of broadband, where cable would link various devices in the home. Consumers could use their high-speed cable connection to download AOL music content, them transfer it to portable players. No company has cornered the home networking space, nor figured out how to make home networking ubiquitous, but there's no doubt AOL will be a major player there.

In other broadband initiatives, AOL has pulled cable veterans Joe Collins and Jim Chiddix into a separate Interactive Video Division, designed to take VOD to the next level. The vision is to expand VOD content into niche areas, taking advantage of commodity-based computer components and downward pricing to greatly expand the amount of content on broadband servers. Thus, AOL Time Warner appears likely to lead the charge toward personalized VOD on a network-PVR basis. Chiddix's group, which also includes long-time sidekicks Louis Williamson and John Callahan, will also tackle integration of Voice over IP service onto Time Warner Cable systems.

Time Warner Cable also is leading the charge in open access, launching AOL Broadband and Earthlink, along with RoadRunner, in multiple markets. The rest of the cable industry is looking on with interest to determine whether multiple ISPs makes economic sense.

And then there is AOL Time Warner's vast library of content, which the company sees as perfect fluid with which to fill broadband pipes across America, whether those pipes end at the PC or the TV. In the process, AOL Time Warner will likely set the tone for what constitutes successful combinations of new technology and content in the years ahead.

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