The Australian subsidiary of America Online has launched a bid to capture the family market through a bundling deal with IBM and video rental company Video Ezy.

The AOL EZY Home Entertainment package will offer an IBM Aptiva PC, two years of membership to AOL Australia, and eight video rentals per week for a two year period.

The system costs AUS$25.99 per week (US$16) for two years, with no payments for the first sixty days, making the total package worth AUS$2478 (US$1550). Buyers of the package will be able to hire one new release video per week from 120 Video Ezy stores.

Some Video Ezy stores will contain a kiosk with the IBM hardware on display so that prospective users can trial the AOL service.

The deal comes after a period where the credentials of AOL in Australia have been questioned. Industry sources have consistently said that America On Line has not signed up anything like the number of users of its rivals.

UUNet Australia and Telstra Big Pond count their subscriber bases in the hundreds of thousands, but estimates of AOL Australia's user base by their competitors don't credit it for more than 20,000 subscribers and the company has refused to release its subscriber numbers.

However, AOL said it was "witnessing a great response" in signing up new local members, and that AOL Australia had achieved the fastest rate of membership growth in the first quarter after launch of any AOL International service. No numbers were given to back up this claim.

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