MSN Client Splitting into Two Versions

In an effort to reverse declining subscriber numbers, the next release of the MSN client will be available in two versions. MSN Premium will be the direct successor to MSN 8, and includes improvements—notably, the ability to connect to e-mail using Outlook—designed to convince more ISPs to bundle it with their broadband service. MSN Plus, a lower-priced edition with certain features stripped out, is designed to attract Internet-savvy users who have so far balked at paying US$10 a month for the MSN client on top of their Internet access fees.

Two Clients, Two Audiences

Between late 2002 and July 2003, subscriber numbers for all fee-based MSN services—dial-up Internet access, the MSN 8 client software and associated services (e.g., online calendar and photo storage), TV-based services (e.g., MSNTV, formerly known as Web TV), and other fee-based online services (e.g., Hotmail Extra Storage)—declined from 9 million to about 8.6 million. The main reason for this decline is that customers are leaving MSN’s dial-up Internet Access as the deeply discounted promotions that originally drew them to the service end. Meanwhile, MSN 8 and other MSN services are not drawing enough of these customers—nor are they drawing enough customers away from competitors—to make up for declines in the dial-up user base.