AOL Launches Teen Service, Preps for GRAMMYs

America Online launched its Red service for teens Tuesday, delivering features such as a customizable desktop, games and message boards as part of its strategy to tailor offerings to specific segments of the AOL audience.

The new service, as first reported by this publication last September, is geared to teens 13 to 17 years old and replaces the AOL Teens channel. The launch comes on the heels of three different versions of the AOL 9.0 optimized service — one for Hispanics, AOL Latino, and one for kids, KOL, and AOL for Broadband for high-speed users. The No. 1 U.S. Internet service is releasing these segment-specific versions in part to attract advertisers eager to reach these niche audiences.

The strategy is also a way of managing the expected decline of a good portion of its dial-up base as broadband access becomes more popular. When it reported earnings last month, AOL parent Time Warner said the service had lost 2.2 million subscribers in 2003. Nearly 400,000 of those departed in the fourth quarter.

The teen launch comes as AOL’s plans to appeal to broadband users by streaming the Super Bowl halftime show have been thwarted by Janet Jackson’s “wardrobe malfunction.” The company hopes to make up for it, at least in part, by offering members something it’s calling “Broadband Rocks” — a live broadcast of music industry legend Clive Davis’ annual pre-GRAMMY party, which takes place Feb. 7 on the eve of the GRAMMY Awards.

While AOL struggles to make itself relevant to the new and growing broadband audience, the new teen service is meant to capitalize on one of the service’s longtime strengths — parental controls that let the adults in a household set limits on a child or teen’s online activities.

“We’re serving those segmented markets [teens] while still providing parental controls,” said Malcolm Bird, senior VP and general manager of AOL Kids and Teens.

Bird said that since the soft launch of the service, which is free to AOL members, traffic has gone up 200 percent compared to that on the AOL Teens channel.

It remains to be seen whether AOL’s teen-only service will continue to grow in popularity, especially given the age group’s notorious skepticism and desire to be hip.

Fellow Internet giant Yahoo! integrated its teen-oriented offerings into the overall network, rather than packaging them together. The decision may have paid off. Though 35 percent of U.S teens use AOL to connect to the Internet, only a tiny fraction of them voted AOL as the site they most liked to visit, while Yahoo! came in No.1, according to a survey of 2,000 U.S. teens conducted in 2003 by Teenage Research Unlimited, a Northbrook, IL research firm.

On AOL’s new service, Teens can customize and personalize their desktops. They can also choose their top five departments from content areas including Music, Games, Sports, Gear and Gadgets, Comics and Anime and Freestyle.

The Red service has content from parent company Time Warner such as Teen People, DC Comics, Mad Magazine, Transworld Skateboarding, Surf, Snowboarding and Motocross.

The specialized nature of the service and the specialized content and areas in Red offer advertisers in many cases a niche within a niche.

“Generally we have areas that appeal to very segmented markets of the teen area. Our Freestyle area that showcases extreme sports is hitting a very specific demographic interested in extreme sports, skating, surfing. Philips is in here pushing a key ring that is an audio player you can take with you to the slopes,” Bird said.

Nintendo is running an advance ad for Game Boy in the Gear and Gadgets section as well.

“Once advertisers see the service they’re approaching us with ideas, specific things we could do unique to the service,” Bird said. AOL is considering the implementation of rich media ads but has not yet made the decision. “We don’t want it to interfere with the experience,” Bird said.

The company will be announcing integrated sponsorships in some of the areas in the next couple of months, according to Bird.

As part of the launch, AOL conducted a survey of teens’ usage of the Internet with Digital Marketing Services in July 2003. It found 53 percent of teens age 13 to 19 go online every day and 73 percent go online five or more days per week.

Further indicating the strength of the teen audience, 18 million teens age 12 to 17 are online today and that number is projected to grow to 22 million by 2007, according to Jupiter Research, which is owned by Jupitermedia, the parent company of this publication.

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