America Online 2009 Annual Report Download - page 11

Table of Contents
We also offer contextually relevant advertising generated based on the content of the AOL Properties webpage the consumer is viewing.
Paid Services
Historically, our primary subscription service has been our subscription access service. Moving forward, we seek to develop, test and market new
subscription products and services that are either owned by us or by third parties. To facilitate this goal, we are planning to develop a single, consumer-facing
platform that will allow us to manage and distribute these additional subscription products as well as our subscription access service. We plan to offer those
subscriptions to our access subscribers and to other Internet consumers.
Distribution of AOL Properties
Content, products and services on AOL Properties are generally available to online consumers and we are focused on attracting greater numbers of
consumers to our offerings. In addition, we utilize various distribution channels which allow us to more directly reach online consumers.
SUBSCRIPTION ACCESS SERVICE
Our AOL-brand subscription access service, which we offer consumers in the United States for a monthly fee, is a valuable distribution channel for
AOL Properties. As of December 31, 2009, we had 5.0 million AOL-brand access subscribers in the United States.
In addition to our content, products and services that are available to all online consumers, an AOL-brand access subscription provides members with
dial-up access to the Internet and, depending on the applicable price plan, various degrees of enhanced safety and security features, technical support and
other benefits. In addition, we continue to offer Internet access services under the CompuServe and Netscape brands.
Our major access service partners are Level 3 Communications, LLC and MCI Communications Services, Inc., who provide us with modem networks
and related services for a substantial portion of our subscription access service. We have agreed to commit a significant portion of our access service
subscribers' total dial-up network hours to the Level 3 and MCI networks. More specifically, 30% of our total dial-up network hours are presently committed
to Level 3, and 50% of our total dial-up network hours are presently committed to MCI. Through take or pay provisions in each agreement, we will incur
penalty payments if we fail to dedicate the required percentage of dial-up hours to these service partners. As of December 31, 2009, we are meeting our
volume commitments to each of these service partners. We have agreed to use the Level 3 and MCI networks until March 31, 2011 and December 31, 2014,
respectively. The agreement with MCI may be renewed at our option until December 31, 2015. Upon expiration of these agreements, we expect to continue
our relationships with Level 3 and MCI or enter into agreements with one or more other providers of modem networks and related services.
Our access service subscriber base has declined and is expected to continue to decline as a result of several factors, including the increased availability
of high-speed broadband Internet connections, the fact that a significant amount of online content, products and services has been optimized for use with
broadband Internet connections and the effects of our strategic shift announced in 2006, which resulted in significantly reduced marketing efforts for our
subscription access service and the free availability of the vast majority of our content, products and services. See "Item 1A—Risk Factors—Risks Relating to
Our Business—Our strategic shift to an online advertising-supported business model involves significant risks".
OTHER DISTRIBUTION CHANNELS
We also distribute AOL Properties through a variety of other channels, including agreements with original equipment manufacturers of computers,
digital devices and other consumer electronics, broadband access providers and mobile carriers. Additional distribution channels include toolbars, widgets, co-
branded portals and
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