Those Annoying Promotional CDs Cost AOL a Ton of Money [AOL]

Remember those annoying promotional CDs that AOL distributed within the 1990s? It felt like they were everywhere and apparently they weren’t cheap either. In reality, things like those discs may need cost AOL ” about $35 per user.”

This curious tidbit was revealed when someone inquired concerning the cost of the CDs on the favored question-and-answer site Quora. Steve Case, who was AOL’s CEO through the promotional disc era, chimed in with the data:

How much did it cost AOL to distribute all those CDs back within the 1990′s?

A lot! I don’t remember the complete spending but do recall inside the early 1990s our target was to spend 10% of lifetime revenue to get a new subscriber. At that time I think the common subscriber life was about 25 months and revenue was about $350 so we spent about $35 to amass [subscribers].

Of course, while the those discs were pretty pricey, they were effective:

When [AOL] went public in 1992 we had not up to 200,000 subscribers; a decade later the number was inside the 25 million range.

I suppose the top justifies the expensive and annoying means. [ Quora via TechCrunch ]

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This post is tagged: early 1990s, Lifetime, new subscriber, question-and-answer, steve case, subscribers