Freedom Rings: RealNetworks Sells 1 Million Songs in 1 Week

Just a week after launching RealPlayer 10.5 with Harmony Technology and unleashing a 49-cent song download promotion on its RealPlayer Music Store, RealNetworks announced that the service has sold 1 million songs. Although that figure falls short of Apple Computer's best week--3.3 million songs sold through the Apple iTunes Music Store during 1 week in May 2004--it clearly establishes RealNetworks as the number-two digital music download service. Perhaps more important to the company, however, is the fact that RealNetworks' RHAPSODY subscription service continues to be the volume leader with more than 550,000 paying subscribers.
  
"RealNetworks is the leader in subscription services and we now believe we are clearly number two in a la carte download sales," Richard Wolpert, RealNetworks' chief strategy officer, said. "Paired with our free music offerings, RealNetworks is the clear leader in digital music services today. We knew that the 49 cent promotion and a campaign showcasing the need for compatibility in the digital music industry would send a powerful message and we are very pleased with the results."
  
The RHAPSODY service offers a library of more than 625,000 songs for download and more than 725,000 songs for streaming. But RealNetworks' real (ahem) innovation is the Harmony Technology, which lets customers play songs they purchased from the RealPlayer Music Store on more than 100 portable audio devices and PDAs. The songs are now compatible with devices such as Apple's iPod, which is based on the Protected Advanced Audio Codec (Protected AAC) format and Dell's Digital Jukebox (DJ), which is based on Windows Media Audio (WMA) and Digital Rights Management (DRM). RealNetworks couples Harmony Technology with its superior 192Kbps DRM-encoded AAC audio format, a high-quality source format that lets RealNetworks transcode (i.e., convert) music from its format to rival formats without a perceptible loss of quality. Music purchased from the iTunes Music Store is available only in a low-quality 128Kbps Protected AAC format that doesn't transcode well to other formats.
  
RealNetworks is also promoting a message about freedom of choice. Previously, iPod owners were forced to use only Apple's music-download service, a fact that could have come back to haunt customers, according to a recent InsightExpress survey. According to the survey results, only 8 percent of iPod owners were aware that files from other digital music stores weren't compatible with their devices. When RealNetworks entered the fray, however, iPod owners had a choice of services; RealNetworks offers higher-quality songs and, for the moment, much lower prices. Users of WMA-based players such as the Dell DJ, however, already have a wide range of music store choices, including BuyMusic, Musicmatch, and Napster; other services, such as MSN Music, will launch soon.
  
The RealPlayer Music Store's "Freedom of Choice" promotion, which offers individual songs for just 49 cents and most albums for $4.99, is temporary, according to RealNetworks. Although the company has been vague about the promotion's timing, a report in "The Wall Street Journal" this morning said that the promotion will continue through early September.

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