Subscribers to MSN's new service, to be offered in early November, will have unlimited access to the Internet and to proprietary Web-based content for a single monthly fee. The cost will be $19.95 a month, the going rate offered by most other ISPs.
People who want to use their own ISP, such as AT&T's WorldNet, which will come bundled with Windows 95, can get access to MSN's proprietary service for about $6.95 a month, Michele Bourdon, MSN product manager.
But in anticipation of MSN's move, AOL may be headed toward the same flat-fee model. CompuServe is also rumored to be headed in the same direction, said Mark Mooradian, senior analyst with Jupiter Communications.
The two other leading online services, CompuServe and Prodigy, which along with AOL fomerly had the nationwide audience to themselves, are also under pressure to change their pricing models as the major telecommunications companies enter the ISP market. But AOL, at least, is planning to charge its subscribers extra to get access to its content. If that's so, then MSN will increase the competitive pressure by offering its content and Net access for one fee.
Some MSN services, primarily those that are transaction-based, will also be available to anyone on the Web by logging on to the network's Web site. Subscribing to the service will let users get behind a firewall to reach the rest of the content, such as entertainment areas, Bourdon said.
MSN will generally offer transaction-based services for free while the proprietary site will focus on providing entertainment such as Slate.
"The focus is on content or programming that's meant to entertain," she said. "The model is more of a programming guide like you see on television. You're going to see comedy, health and fitness, history shows, and stuff for kids and teenagers. We're going to have a network on the Internet. We think it's going to be compelling enough for people to go to and pay for."
The combination of the flat-rate offer plus the availability of this separate subscription for MSN content is intended to prepare MSN for a future when phone companies such as AT&T offer Internet access for free or a very low price, Bourdon added. But right now, for at least the first year, she expects most MSN users to be getting their Internet access through the service itself.
She said MSN is already the third-largest proprietary service, with 1.6 million members, and expects the new Web-based version to substantially increase that number.
Mooradian stressed MSN is not alone in its pursuit of the Web, though. "The Web definitely changed everybody's strategies," he said. "The question is, is being a Web-based service going to be compelling enough so people say this is more interesting than AOL?"