AOL still has 2.3 million dialup subscribers—and they’re very profitable

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AOL has spent the last decade—since the broadband era really took off—trying to build a business around online advertising. But its legacy dialup internet subscription business is still generating a big portion of its sales—and most of its profits.

AOL dialup subscribers chart Q2 2014

At the end of June, AOL had 2.3 million subscribers, paying an average of $20.86 per month, it said today as part of its second-quarter earnings presentation (pdf). And after years of fast decline—as most Americans who could subscribe to broadband did so—the business has stabilized. AOL’s subscriber count is down just 245,000 from the same time last year, and 84,000 from the end of the first quarter. (Of course, it’s down 21 million from a decade ago.)

With most expenses long paid, it’s also creating an impressive amount of profit. AOL’s “membership” group—which includes the dialup access business—generated about one-third of the company’s $607 million in sales last quarter, but an oversized amount of its operating profit: $143 million of “adjusted OIBDA” (operating profit from its core business, before accounting adjustments), compared to $122 million total for the company.

Expect the subscriber base to continue to shrink, as wireless broadband continues to build. But much like Yahoo’s search business, for now AOL can enjoy its vintage cash machine.