RealNetworks Enters Online Music Store Biz - 07 Jan 2004

Multimedia giant RealNetworks announced a belated entry into the crowded online music store business with the release of a new RealPlayer version, RealPlayer 10. The company already has a subscription music service, RealRhapsody, which charges customers a monthly fee to access streaming audio. RealPlayer 10, however, includes a new RealPlayer Music Store service that's similar to offerings such as Apple Computer's iTunes and Napster 2.0, providing customers with 99-cent song downloads. The service offers more than 300,000 songs and uses a higher quality version of the controversial MPEG-2 Advanced Audio Coding (AAC) format that Apple uses in its store. RealNetworks, which is currently suing Microsoft for antitrust violations, is the first company other than Apple to spurn the software giant's popular Windows Media Audio (WMA) format for use in a service that digitally delivers purchased songs.

"RealPlayer 10 is a breakthrough product," RealNetworks Chairman and CEO Rob Glaser said. "Not only is it the greatest media player ever, RealPlayer 10 is one of those once-in-a-generation products that redefines its category. RealPlayer 10 is the first product ever to directly integrate finding, organizing, buying, playing, and managing digital audio and video in a single fun, easy-to-use product." RealPlayer 10 visually resembles the company's previous media player, RealOne, but adds support for a variety of new devices, including Apple's popular iPod and palmOne's Treo 600, and all popular media formats, including MP3, MPEG-4, QuickTime, and WMA. Strangely, though, users can't copy music that they purchase from the Music Store service to an iPod--even though RealPlayer 10 supports the iPod--because of an incompatibility between the versions of AAC that RealNetworks and Apple use. These kinds of incompatibilities are sure to bedevil users and cause confusion.

RealNetworks' entry into the online music store market is long overdue, though the company makes a decent profit from the relatively small user base of RealRhapsody subscribers. (Analysts suggest that digital music subscriber services, while likely to attract far fewer users than online music stores, will generate more profits because of the guaranteed monthly income.)

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