Pittman Says Internet Revolution Realized

Robert Pittman, co-chief operating officer of AOL Time Warner, wasted no time in getting to his point at the opening keynote of Internet World Fall/Streaming Media East in New York: the Internet has arrived. Now in two-thirds of U.S. homes, the Internet has a substantial user base and the preferred payment plan of Internet consumers is something AOL Time Warner is quite familiar with; monthly subscriptions.

Even under current slumping market conditions, Pittman was optimistic about online consumer business models. He outlined three benefits of a subscription model: direct revenue, opportunity to cross-promote add-on products, and lastly, sell advertising. "That is the way to make money on the Internet," he stated.

Pittman emphasized how consumers want convenience. As an example, he noted how AOL Radio, which has not changed or been upgraded, jumped to two million unique users last month by simply adding a button to the AOL toolbar. Prior to the toolbar appearance, the same AOL Radio service, said Pittman, was less convenient than turning on a physical radio.

Pittman went on to coin the term "digital household," powered by broadband and home networks, as the next phase of the Internet revolution and a significant opportunity. He noted how the typical ‘60s household had only one television, and the typical ‘90s household had just one PC. Correspondingly, Pittman expects the use of PCs in homes to grow from one to many, as households did with television sets. In addition, he expects those PCs to be networked together across multiple devices, including televisions, stereos, telephones, PDAs and gaming consoles.

Pittman also discussed the power of promoting across several platforms, noting that Harry Potter, Oceans Eleven, and Cats and Dogs – all Time Warner films – each opened at number one at the box office as a direct result of heavy cross-promoting on AOL properties. By the same token, the WB Network’s "Gilmore Girls" had its highest ratings ever when promoted on AOL. The same principles will, in theory, apply to online media businesses working on smaller scales.

Perhaps Pittman’s most powerful statement was that as far as online consumer spending is concerned, the Internet revolution is in full force. Pittman said that in traditional shopping areas, consumer Internet spending has continued to rise. So, while many companies have seen their fortunes fall, and while stock markets have seen a great deal of volatility over the past year or so, e-commerce has grown steadily. Emphasizing the Internet revolution’s coming of age, his last slide said simply: "It’s Happening Now!"