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Movie freebie to lure AOL newbies

Want a free flick? America Online teams with Blockbuster.com for a giveaway in an attempt to keep its subscriber ranks growing.

America Online is giving new dial-up customers 12 free video rentals for one year through a joint promotion with Blockbuster video stores.

It's the latest AOL partnership with a big brick-and-mortar company to lure new customers with giveaways. The strategy is timely, as growth in new Internet service subscriptions declines and competition grows. In March, the leading Internet provider offered subscribers coupons for a free slice of apple pie at Burger King for the 45th anniversary of the Whopper.

Under the Blockbuster deal, customers who sign up for AOL 7.0 through free discs available at Blockbuster's 4,300 stores in the United States are sent coupons via e-mail every month for a year.

The online coupon technology is from E-centives, a developer of online marketing software. The coupons contain bar codes tracked by Blockbuster's bar-code systems, thwarting the use of fake or copied coupons.

The software, hosted by E-centives, also collects data about who has printed and used coupons, essentially tracking the success of the promotion. The data can then be analyzed to tweak promotions and target responsive customers with more promotions and marketing, said Kamran Amjadi, chief executive of E-centives in Bethesda, Md.

AOL and Blockbuster have coordinated on cross-marketing initiatives since 1999, when AOL made a $30 million investment in Blockbuster.com. Under the three-year marketing agreement that was part the investment, Blockbuster.com became an anchor tenant on AOL, while Blockbuster promoted AOL by distributing free software discs in its stores.

The AOL investment in Blockbuster.com was to be used in a joint effort to develop broadband movie delivery technology, or video-on-demand. Nearly three years later, AOL continues to test the technology, but Blockbuster has conceded recently that its own tests have been less than successful as costs ran too high to create a profitable business. Blockbuster said it never jointly developed or tested technology with AOL.