AOL hyped up its subscriber numbers
The reason why AOL's subscriber numbers have fallen so drastically is not because a large number of subscribers have been bailing on the Internet Service Provider but because AOL may have hyped up its numbers the last few years, and the new management is simply going in and cleaning the subscriber lists so that accurate subscriber numbers can be determined according to this Wall Street Journal story (subscription required).
People familiar with the situation say part of the cleanup involves the termination of subscribers generated by a little-known America Online initiative. Starting in 2000, AOL began selling limited-usage online accounts in bulk for as little as $1 to $3 a month to its marketing partners such as Target Corp., J.C. Penney Co. and Sears, Roebuck & Co. A regular limited-usage subscription at that time cost about $10 a month, while a regular subscription was slightly more than $20. The retailers then could offer the online service to their employees for a discount and pocket the difference.
...In total, people familiar with the situation say America Online generated at least 830,000 subscribers through these bulk sales, mostly during 2001 and 2002. That would have accounted for 16.7% of the total subscriber growth, which was just under five million, during that period. Currently, AOL has 25.4 million U.S. subscribers, down from a peak of 26.7 million on Sept. 30, 2002.