RealNetworks urges Apple to license Fairplay DRM; wants to form ‘tactical alliance’ in online music

“RealNetworks made a direct appeal last week to Apple Computer, its Internet music rival, suggesting that the two companies form a common front against Microsoft in the digital music business,” John Markoff and Steve Lohr report for The New York Times. “The offer to create a ‘tactical alliance’ was made on April 9 by Rob Glaser, chief executive of RealNetworks, the Seattle-based Internet music and video service, in an e-mail message to Steven P. Jobs, Apple’s chairman.”

Markoff and Lohr report, “But if an alliance with Apple could not be struck, Mr. Glaser strongly hinted in the e-mail message that he might be forced to form a partnership with Microsoft to pursue ‘very interesting opportunities’ because support for Microsoft’s media-playing software seems to be growing. Apple is clearly the early leader with its iTunes online music store, which downloads and plays songs only on Apple’s popular iPod handheld devices. Besides RealNetworks, a pioneer in software for distributing and playing music and video, major companies are entering the market… Microsoft is expected to offer its own digital music store before long.”

“It is against this backdrop that the timing and details of Mr. Glaser’s offer to Mr. Jobs are particularly intriguing. In his message, which was obtained by The New York Times from a person close to Apple, Mr. Glaser asked Mr. Jobs to consider licensing Apple’s Fairplay digital rights management system to RealNetworks to permit customers of the RealNetworks music service to play their digital music collections on iPod players,” Markoff and Lohr report.

“In exchange, RealNetworks would make the iPod its primary device for the RealNetworks store and for the RealPlayer software. The message notes that both RealNetworks and Apple support the same digital music technology standard, known as AAC. But because it is not possible for RealNetworks’ encrypted music services, Rhapsody and the Real music store, to be played on iPod, RealNetworks is considering switching to Microsoft’s competing WMA format, which would make the RealNetworks services work seamlessly with Microsoft’s technology,” Markoff and Lohr report.

“Apple executives would not comment on the message. But it seems likely Mr. Jobs will rebuff the offer. Mr. Glaser said he had not received a response from Mr. Jobs, and in his e-mail message Mr. Glaser said he was going to be in Silicon Valley this week and suggested that he meet with Apple executives today. Mr. Glaser has been vocal in his condemnation of what he considers Apple’s proprietary strategy and he has said he believes the strategy is a mistake. Apple is running the risk of following the same path it took in its development of its personal computer, he argued,” Markoff and Lohr report.

“It is widely believed in the PC industry that Apple’s refusal to license its Macintosh operating system in the late 1980’s contributed to the operating system monopoly of Microsoft’s Windows,” Markoff and Lohr report. “‘Real understands how incredibly powerful the Microsoft music initiative will be,’ said Richard Doherty, a computer industry consultant and president of Envisioneering. ‘I don’t think that Jobs understands this. He doesn’t realize how big the juggernaut is about to get.'” In his e-mail message to Mr. Jobs, Mr. Glazer said that he was reaching out to Mr. Jobs before making a move to switch camps. Mr. Glaser said he was surprised that the proposal had been leaked. “‘Why is Steve afraid of opening up the iPod?’ he asked in a telephone interview. ‘Steve is showing a high level of fear that I don’t understand.'”

Full article here.

MacDailyNews Take: Glaser sees the writing on the wall and it says “RealNetworks is roadkill without iPod support.” Steve Jobs has just pumped 807,000 more iPods into users hands in the last 90 or so days. That’s 807,000 more users that won’t be buying music from Real or Napster or Wal-Mart or anywhere but Apple’s iTunes Music Store. The more iPods Apple sells, the less relevant outfits based on Microsoft’s WMA format become. We can hear the average person saying, “Your store doesn’t work with my cool new iPod? Sorry, I’ll use Apple’s iTunes instead, thanks.” This is hardball. Steve Jobs is a Hall of Fame player and, to top it off, it’s his ball.

Real offers nothing. Absolutely nothing. The iPod is the key. As long as Apple keeps selling them like wildfire, Jobs should keep dropping Glaser’s desperate emails into the Trash.

Microsoft has a big problem here if they want to do the “music thang.” iPods don’t do WMA. Apple is currently selling iPods at the rate of one every nine seconds. Microsoft’s desktop monopoly cannot help them here. Do not be afraid, Jobs knows what he is doing; and this has nothing whatsoever to do with 1980’s OS wars.

Related MacDailyNews articles:
RealNetworks caught between Microsoft rock and Apple hard place – April 08, 2004
Real CEO hopes for Apple iPod opening – March 31, 2004
Apple should not let any other online music services work with iPod – March 24, 2004
Real CEO Glaser begs Apple to make iPod play nice with other music services – March 24, 2004

67 Comments

  1. ‘I don’t think that Jobs understands this. He doesn’t realize how big the juggernaut is about to get.’

    I guess doesn’t know anything about the online music and “ipod” market.

  2. Oh, that’s right I forgot – Apple formed an alliance with HP (you know, one of the world’s largest supplier of desktops). So I wonder who has more of an influence, HP or Real? Hmmm, let me guess.

  3. If Apple’s goal is to sell more iPods, then this deal seems to make perfect sense. Why not try and spread AAC + Fairplay? Won’t this help defeat Microsoft/WMA?

  4. stevie does not like threats from what I have read, and this is a direct threat, but the point’s are there

    “If the point is to “sell iPods” then Apple would be smart to license Fairplay to Real.”

    and the fact that real will be going the wma route if this does not pan out….

    does not seem like a tough call, but the tight integration with itunes is one of the main reasons the whole system works so well, throwing rhapsody in the mix changes things..on that note, this might just bring more people to the iTunes music store..

  5. Microsoft is not a threat. All of the players that support WMA combined do not equal half of all of the iPods sold. They can bundle apps and formats ’til the cows come home, but it it won’t work with people’s iPod, MS loses.

    Steve Jobs has won this already. We just have to sit back and watch Real and Napster and Wal-Mart and the rest beg and whine while they die like dogs.

    F ’em all. It’s about time Apple won one! Hope Steve makes ’em suffer.

  6. “If the point is to “sell iPods” then Apple would be smart to license Fairplay to Real.”

    What? They can’t even come close to meeting demand. Real can’t help them sell more. Anyway, when demand is finnally met, the price will come down and Apple will continue to sell them by the millions – with or without Real.

  7. Um gnugrep,

    It’s not Apple’s job to defeat Windows.

    It’s Apple’s job to make as much profit as possible.

    Perhaps Apple is trying to licence Fairplay to Microsoft by adding compatiblity into Windows Media Player. Taking Real out of the picture.

    There has to be more to this story then we’re hearing.

  8. LIcensing will have to come from somewhere right?

    THe author sounds like a fool, supposing to know more about MS than Steve Jobs. Damn. Apple is about vertical integration and the pleasant computer experience.

    If ppl wanna rebrand the iPOd SURE!
    but apple wants a seamless computing experience…

    real doesn’t get it..

    MS gets it.. check out the xbox.. they’re hypocrites.

  9. I agree! If Apple’s goal is to sell iPods, then they should allow users (Windows mostly) that for some God forsaken reason like the Real networks service. After all not everyone might like the ease of use that iTunes store is.
    But the bottom line is that Apple shouldn’t lower their guard. If they want to sell many more iPods, then having many music downlod sources, the better. True, Real and others might not have a nice and tight integration between operating system and the iPod, but that will allways be the case with the Windows users, (crappy operating system), that is, until they move to the Mac!

  10. Why license Fairplay when Apple owns the number one music store and the number one player? Charity?

    Apple doesn’t need Real to battle Microsoft. In fact, Apple has won – it’s all about iPod sales, dudes!

    Why don’t we all just relax, sit back and watch Real, BuyMusic.com, Napster, etc., etc., etc., dwindle and die? It’ll be fun!

    Within 12 months, napster.com will be available for registration.

  11. If Real was smart they would make Linux a BIG part of their media strategy. Yeah they have the Helix project going, but it’s not where it should be. Microsoft owns the Windows market plain and simple. Why are all these companies wishful about somehow breaking into the software realm of Microsoft’s monopoly? I guarrantee you that as long as Microsoft bundles it with Windows, then the third party competing for the same space will lose out. Luckily for Apple, iTMS has been the exception to the rule.

  12. Well, that’s a lot of bluster and quite illogical.

    Over 1.5 million iPods have been sold in six months (54% of the overall total), showing that iPod is the player to be seen with.

    Apple has also shifted a minimum of 37 million tracks in that same period, out of a likely cumulative 70 million sold by the end of this month (again, over 50% sold in the last six months): this shows that iTMS is the store to use given that OD2 are shifting a mere million tracks per quarter and nobody else wants to talk about their numbers.

    So, if Rob wants to go and jump back into the piranha tank and compete for the other 30% of the legal download market with Napster, OD2, BuyMusic, Musicmatch and – in the near future – Microsoft, he should go and do that.

    But if he wants to coax Steve Jobs and Apple into throwing him a bone, he’d better start speaking more politely and consider making Apple and MPEG-4 a strategic platform for Real’s products. After all, where’s the commitment to open development when it comes to video?

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.