According to a new survey by Media Metrix, RealNetworks is continuing to lose market share to Microsoft's Windows Media Player (WMP) and related technologies. The survey, which was released earlier this week, says that RealNetworks RealPlayer use has fallen about 10 percent in the past 6 months, while WMP use has increased almost 30 percent in the same time period. This coincides with the release of Windows Media Player 7 (WMP7), Microsoft's latest version of the software, which includes a number of new features, such as a media guide, CD-ROM recording and encoding, playlist support, and more. WMP7 is bundled with Windows Millennium Edition (Windows Me), which sells almost half a million copies a month. It's also available for free from the Web. RealNetworks offers limited versions of its software for free, but charges for the full versions.
But analysts say the real reason Windows Media is so popular has more to do with Microsoft's aggressive marketing of the technology. Since it released WMP7, the company has signed a number of exclusive deals with digital media distributors to ensure that online video and audio is encoded in Windows Media formats. And Windows Media's server component, which is bundled with Windows 2000 Server products, is free--compared to the astronomical prices charged by RealNetworks for its software. In Real's favor is inertia: The company is somewhat entrenched in the digital media distribution market, and RealNetworks still commands a solid lead in the streaming market.
Like any popular technology, digital video and audio aren't standing still. Microsoft recently revealed its upcoming Windows Media 8 (WM8) technologies, which offer smaller file sizes with no noticeable loss in quality, a huge boon in these bandwidth-starved days. And Microsoft will include WMP8 in Whistler, the next version of Windows.