AOL may offer some premium video on a subscription basis

With a stable full of free, high-end content starting to flow in, AOL--still struggling to turn a profit after it was spun off from Time Warner in 2009--may be looking to convert some of it to a premium subscription model.

But, while the company has signed deals with Heidi Klum, Queen Latifah and Survivor's Mark Burnett, bringing in tons of content produced specifically for the Web, it may instead turn to some of its more specialized, non-consumer focused programming.

CEO Tim Armstrong said it might look to B2B content for a revenue boost. A likely player? Its AOL Defense portal, which is focused on the defense industry.

"I think content subscriptions on the Internet can be a very viable business," Armstrong said.

The company has hemorrhaged cash since the breakup, although there were some signs Armstrong had managed to slow the bleeding in the first quarter this year. AOL's first quarter revenue declined 17 percent to $551.4 million and saw income tumble 86 percent to $4.7 million, but both numbers beat analyst expectations.

"We put major investments into things like video," Armstrong said. "We're now the No. 2 video player on the web now after YouTube... Two years ago, AOL was nowhere on the web."

He added, "Content profitability is a North Star goal for us." 

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Related articles:
AOL beats analyst 4Q expectations; plans continued online video push
AOL signs content deal with Queen Latifah
AOL teams with 'Survivor's' Burnett for series
AOL signs content deal with Heidi Klum, Full Picture Entertainment
AOL's David Eun on the 5min Media acquisition

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