New Media: No such thing as a free launch?

BY NOW most people will have heard that AOL has "reinvented" Netscape as a free ISP, and if you haven't, then thank your lucky stars you've missed the advertising.

I could go on about ISP advertising all day - AOL's Connie always gets my goat, and whoever dreamt up the strapline "I found it on Freeserve" should be hanged, drawn and quartered. But I see bigger developments in the effervescent world of the free ISP that warrant a little more focus.

I'm going to go out on a limb here and say that, in keeping with its lightning reflexes, AOL has reacted too late to market trends and missed the boat. With Freeserve approaching its first birthday, which in Internet time means that it's really not far from those tumultuous teenage years, and with more than 200 competing free ISPs in the marketplace, AOL will find it difficult to stem churn just on the strength of the Netscape brand.

Without a doubt, Netscape Online will attract quite a few users - you only have to look at how many people still use Netscape Navigator despite every free ISP bundling Microsoft Internet Explorer on to their CD-rom. Brand loyalty is now of paramount importance in the Internet space and AOL/Netscape is wise to capitalise on its strong brand name.

The same is true of the BBC, which last week launched via its commercial arm, BBC Worldwide. But although NOP research shows that 66 per cent of people interested in the Internet are also interested in the BBC being an ISP, what can freebeeb offer that the other freebies can't? Exclusive content would be a start, and why not look at a tie-up with BT ADSL to provide free programme archive clips?

That would be innovative, and innovation seems to be in short supply among these new ISPs. Where is the toll-free model the market was hoping for? For its pains, Netscape has done nothing more than copy the raft of free ISPs that have enjoyed the bandwagon ride in the past year. By targeting "savvy DIY Internet users", Netscape is forgetting one key thing: savvy Internet users have on average four different ISP accounts, are fiercely cynical, and are constantly on the lookout for completely free access.

Toll-free is still on hold

While I'm on the subject of free access, news has it that is threatening to sue the recently launched copycat service Greatxscape, perhaps the greatest oxymoron the Web has ever seen. LocalTel, the telco behind, is demanding that Greatxscape withdraw all marketing materials that refer to it as "the UK's first nationally available free time online ISP". Given the problems that have been plaguing LocalTel since it launched, perhaps it would be better off spending its money on improving the quality and reliability of its service and pacifying its thousands of unhappy customers, some of whom have now started picketing its offices.

The great catch is that has led all of its "Screamers" to ditch their telephone service in favour of the unreliable LocalTel service. Not only has this caused frustration among customers wanting to access the Internet, but it has also meant that some customers have been unable to make basic phone calls. Those wanting to cancel their LocalTel subscription find themselves faced with a pounds 13 disconnection charge and the hassle of reconnecting with the likes of BT. So what initially seemed like a great ISP model when it launched is now widely viewed as being one of the biggest stitch-ups in Internet history.

The market is waiting for a toll-free ISP. X-Stream could go this route and would be well-advised to get there first before the much-talked-about Freedom-I hits the market. Freedom-I, which is backed by Freedom Telecom, the company that plays annoying ads during free phone calls and NTL, has the potential to shake up the overcrowded market but has yet to confirm when it will launch. Let's hope that it's sooner rather than later, or else there's going to be more unhappy campers in free ISP land.

Who's the digital tsar?

Remember the Government issuing a statement in November saying it was going to appoint a digital tsar? Since then it has kept quiet, and has allowed the US to creep in and beat it to a decision, appointing the 39- year-old Elizabeth B Echols as its e-commerce tzar. The UK job has been offered to Alex Allan, the high commissioner in Australia, who will not return to the UK until January. But whether Allen will have his finger on the pulse of UK new media is another matter. Clearly, the right thing to do would have been to offer it to someone from the new media industry, but of the six industry applicants of "high enough calibre", most were put off by the low pay and the prospect of becoming the scapegoat for the Government's digital faux pas.

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