Those AOL CDs From The 90’s Costed $35 Per User

Posted Dec 30, 2010

Former AOL CEO Steve Case answered a question on Q&A website Quora about how much those promotional CDs that the company sent out costed. Case said that each AOL CD costed “about $35 per user.” Below is the Q&A between the Quora user and Steve Case:

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].

It turns out that all of these marketing costs worked because:

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

[TechCrunch via Gizmodo]