Those Annoying Promotional CDs Cost AOL a Ton of Money

Remember those annoying promotional CDs that AOL distributed in the 1990s? It felt like they were everywhere and apparently they weren't cheap either. In fact, things like those discs may have cost AOL "about $35 per user."

This curious tidbit was revealed when someone inquired about the cost of the CDs on the popular question-and-answer site Quora. Steve Case, who was AOL's CEO during the promotional disc era, chimed in with the information:

How much did it cost AOL to distribute all those CDs back in the 1990's?

A lot! I don't remember the total spending but do recall in the early 1990s our target was to spend 10% of lifetime revenue to get a new subscriber. At that time I believe the average subscriber life was about 25 months and revenue was about $350 so we spent about $35 to acquire [subscribers].

Of course, while the those discs were pretty pricey, they were effective:

When [AOL] went public in 1992 we had less than 200,000 subscribers; a decade later the number was in the 25 million range.

I suppose the end justifies the expensive and annoying means. [Quora via TechCrunch]