Yes. This. It's a reoccurring battle that all companies that build some kind of infrastructure and offer content/data services on that infrastructure end up facing.
When they built the pipes, there was no data/content, so they had to create it. But now there is so much more content/data that is so much better, and people just want to use these companies as a dumb pipe to get to the good stuff.
We see it now with cell phone carriers and cable TV companies who built infrastructure to transmit data, and also wanted to sell you content/data for that infrastructure. Hence phones from a decade ago full of bloatware and crappy ringtone stores and crappy Brew-based "app" stores, and cable providers who (still) have poor DVR interfaces and pay-per-view and TV packages.
The iPhone's most powerful innovation wasn't a touchscreen computer in your pocket. It was the business relationship with the cell phone carrier Cingular (and then AT&T). It was wedge that freed the device so people could control it (relatively) more, and allowed people to treat the network as a dumb pipe. Its still early, but Netflix, Youtube, Hulu, etc are largely doing the same thing to cable TV.
This goes back further than AOL. You can see it with AT&T, their refusal to allow 3rd party equipment on the POTS network, the rise of Sprint using their infrastructure, and their ultimate breakup.
Every time this battle has happened the infrastructure companies lose and get pushed into "dumb pipe."
1 - aol was quite expensive to use: it was a long time before they introduced flat rate pricing. When I got it in the mid 90s, you paid something like $20/mo for 15 hours (it's been a long time) and then paid something like $2/hour for every hour after that. I ran up a $60 charge and then had to be much more careful about how much time I spent online. Lesson: because aol was so expensive to use, it incentivized people to use raw internet which had much less content at that time. But some local isp offered $20/mo unlimited use pricing.
2 - they basically missed the transition to broadband
Had they realized they were a content business that had to run access infrastructure out of necessity, I think they could have had a shot at owning the internet. Thankfully they messed that up.
> you paid something like $20/mo for 15 hours (it's been a long time)
I don't think it was that much, because when AOL first came out with their "$20/month unlimited plan" (years after the regular ISPs did), I remember thinking "this is great for people like me, but I kinda feel bad for people who only use their connection for an hour a week". I think it was more like $7/month for your X free hours (and I remember they kept bumping the X as more and more people began integrating AOL into their daily lives until they finally said "fuck it, we're going unlimited").
Also, people would get around it by using the crapflood of AOL CDs they got everywhere to register new accounts every month. They really started ramping up the free hours on those... when you got to "100 free hours", it made more sense to just make a new account and use a new AOL CD every month.
When they built the pipes, there was no data/content, so they had to create it. But now there is so much more content/data that is so much better, and people just want to use these companies as a dumb pipe to get to the good stuff.
We see it now with cell phone carriers and cable TV companies who built infrastructure to transmit data, and also wanted to sell you content/data for that infrastructure. Hence phones from a decade ago full of bloatware and crappy ringtone stores and crappy Brew-based "app" stores, and cable providers who (still) have poor DVR interfaces and pay-per-view and TV packages.
The iPhone's most powerful innovation wasn't a touchscreen computer in your pocket. It was the business relationship with the cell phone carrier Cingular (and then AT&T). It was wedge that freed the device so people could control it (relatively) more, and allowed people to treat the network as a dumb pipe. Its still early, but Netflix, Youtube, Hulu, etc are largely doing the same thing to cable TV.
This goes back further than AOL. You can see it with AT&T, their refusal to allow 3rd party equipment on the POTS network, the rise of Sprint using their infrastructure, and their ultimate breakup.
Every time this battle has happened the infrastructure companies lose and get pushed into "dumb pipe."