By Rachel Chalmers
How does Real Networks Inc CEO Rob Glaser do it? Since Netscape Communications Corp fell to the AOL merger last year, Microsoft Corp’s greedy eye for internet platform dominance has fallen more and more often upon Real. Far from quailing beneath that glare, Glaser appears to thrive on the attention. It was out in force yesterday, the first day of the Real ’99 user conference. Like Netscape before it – though Real executives would no doubt reject the unhappy parallel – Real’s latest offering embraces an internet-generated popular phenomenon. Where Netscape sprinkled its Mozilla project with what one participant later called the magic pixie dust of open source development methods, Real hopes to cash in on the astounding success of the people’s audio compression format, MP3.
Even more daringly, the company intends to do so without alienating its corporate content providers, the members of the Recording Industry Association of America (RIAA), which views audio compressed in MP3 as tantamount to an admission of copyright theft. Here’s how it’s supposed to work: Real’s RealJukebox will play your legitimate MP3s, while at the same time supporting a range of back-end security mechanisms including IBM’s Electronic Music Management System (EMMS), Liquid Audio’s watermarking technology and AT&T’s A2B, to keep RIAA happy. That’s a nice piece of diplomacy, but where’s the revenue model? Glaser says Real will ship RealJukebox Plus, a bundle of extra features at a price, later this year. And he says he anticipates other e-commerce-based revenue streams for Real when the Jukebox takes off as a music purchasing platform. But will net users ever accept advertising in their streaming media content?
People want great programming for free with no advertisements, Glaser admits. It’s like me. I want great banana splits for dessert every night with no calories. Everyone, he implies, recognizes the need for compromise. Besides, he expects the whole situation to change once personalization is well understood. Targeted ads, like those in bridal or computer magazines, are as compelling as editorial content, he points out: Advertising becomes something people want or are happy to have, rather than something they find unctuous. In a personalized world, the amount of times people will say ‘I hate that ad’ will diminish.
It might be fair to say that the opportunities presented by Real’s streaming media platform dominance is exciting enough to neutralize the sense of threat from Glaser’s former employer, Microsoft. As he himself puts it: We’re not in the PC operating systems business. We’re 100% focused on media platforms, and streaming media is a very deep thing. Our biggest challenge is to keep driving forward, Glaser concludes. Microsoft has been subsidizing NetShow for two to three years, yet they still have only single digit market share. Wait, isn’t that just what Netscape used to say?
