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Keeping it Real

RealNetworks prepares to fend off Microsoft. Tracks hed: Keeping it Real dek: RealNetworks prepares to fend off Microsoft.

RealNetworks’ Web site trumpets itself as “The source for all your Internet media needs.” While its slogan might seem preposterous to some, the company is dead serious about it. A scan of the company’s product list seems to bear this out: multimedia presentation tools, encoding products, video-capture cards, audio editors, video editors, and intranet administration tools encompass the range of Real products, from free downloads to $4,000 proxy servers.

The company’s best-known product, the RealPlayer streaming media player, is only the tip of the iceberg. But media delivery is also Real’s bread and butter, and the company is showing some teeth lately in its efforts to defend its turf.

Real’s desire to be all things to all people might seem antithetical to the conventional wisdom of concentrating on doing only one thing well, but it seemed to be working for Real–until this year, when the Internet roof caved in. Sales declined, staff were laid off, and the most ominous cloud was still on the horizon: Windows XP. The new Microsoft operating system launches Windows Media Player–not RealPlayer, as with previous OSes–every time users request an MP3, play a CD, listen to an online radio station, or try to employ some other audio feature.

But Real may be in a position to fight back, and possibly even vanquish Microsoft’s efforts in the streaming-media arena. Real recently entered into agreements with 20 media and content providers (including, Cisco, and Sun) that provide programming for the RealOne Media Player launched in November. RealOne, a combination of RealPlayer and RealJukebox, will also be included in the $9.95-per-month GoldPass subscription service. Plus, it promises sound and picture quality leagues beyond anything Real has offered previously. How many listeners go for the subscription services will likely depend on which other content providers are on board, and how accurate Real’s claims about quality turn out to be.

Another way Real might gain a leg up on Microsoft is through a licensing agreement reached recently between a group of online subscription services. The agreement lets record companies automatically license works for online music services in bulk without having to clear songs with individual publishers. In order to offer online music, providers must pay mechanical and publishing rights, a process that usually involves protracted negotiations with various publishers and labels over royalty rates and other matters. By cutting that process short, and by getting in on the ground floor of the new clearance process, Real and its partners could line up licensing for thousands of recordings before Microsoft knows what hit it.

I’ve picked on Real in the past, mostly for making its fortune on low-fidelity streaming technologies that had no business reproducing music. But even despite Microsoft’s and Window’s XP’s stiff challenge, RealNetworks remains the top provider of software for audio and video delivery via the Internet, with 215 million home consumers in the loop. Its ingenuity in exploring new avenues of revenue might help maintain or enhance that figure.

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