The two giants announce a deal to offer content from a new magazine aimed at teenagers exclusively on AOL.
It marks Time New Media's first exclusive deal with the nation's largest online service, Dan Okrent, editor of Time New Media, told CNET's NEWS.COM after a panel discussion at the Comdex trade show on Monday--the same day America Online announced its membership reached the 10 million mark.
Teen People will launch together at newsstands and online in January 1998.
As previously reported, the magazine's online home will feature content exclusive to AOL members. The online content, which the companies said will be aimed at "today's 30 million teens," will include a "Celebrities" area with multimedia slide shows, a "Real Teens" area showcasing the accomplishments of everyday young people, as well as advice columns, daily horoscopes, and chat and message boards.
Bob Pittman, president and CEO of AOL Networks, said in a statement, "Teen People will provide compelling stories and information that reflects the qualities of our audience: in touch, intelligent, involved, and--of course--fun."
For Time Warner, it is an opportunity to use the Internet to help launch a new magazine, typically a risky proposition. The company increasingly has been turning to the Net to gain "synergies" from its giant media empire and, in turn, generate more profits.
For AOL, the deal is a chance to run exclusive content from one of the nation's largest media companies on its service. The line is blurring between online services and Web-based Internet directories, and exclusive content is one factor that will help distinguish them from one another.
Sources said financial terms call for AOL to pay Time Warner under the agreement. Okrent wouldn't comment, but he did say that Teen People will promote AOL in print ads.
The Time Warner-AOL alliance may raise concerns among some consumer groups, however, which worry about exclusive content deals on the Web that put too much power in the hands of too few, squeezing out smaller competitors. (See related story)
Okrent said the deal makes good business sense because the magazine and AOL have a common audience: teenagers. "My 14-year-old daughter is on AOL all the time," Okrent noted. That's what made the exclusivity worthwhile, he added.
Teenagers are considered a lucrative market by content providers because of their spending habits and familiarity with the Web. According to a recent study, about 14 percent of U.S. children and teenagers log onto the Internet, making it one of the fastest-growing segments of the industry. That number is likely to increase with the push to wire classrooms and as home PCs get cheaper.
"On January 9, the editors of People introduce a brand-new magazine and an online site made for totally plugged-in teens--just like you," reads a promotion now posted on the Web. "Log on for hot buzz on today's grooviest stars and styles, real love advice, scarily true horoscopes, and more."
Okrent also said Time New Media will launch a new subscription-based site dubbed Fortune Investor for die-hard investors and stock traders.
Time New Media's game plan recently has been to begin charging for some of its financial and entertainment content. Okrent said the financial Web sites already are profitable.