“To a multi-billionaire like Bill Gates, $761m (£428m) might not be a huge sum. But to Rob Glaser it is a windfall that could make his RealNetworks one of the key players in the future of video- and audio-playing software,” Stephen Pritchard reports for The Independent. “The $761m is what Microsoft paid earlier this month to settle an anti-competition lawsuit brought by its American rival, alleging that Gates’s company had used its Windows operating system to lock out Real’s RealPlayer software in favour of Windows Media Player… With the competition authorities on his side, Glaser, Real’s chief executive, could have fought on. Instead he settled for a deal that amounts to around two and a half years’ turnover for his company. Just over half of the settlement, $460m, is in cash. The remainder will be paid for in services from Microsoft, such as advertising for Real’s Rhapsody music service on Microsoft’s internet portal, MSN.”
Pritchard reports, “Glaser’s decision to opt for access to Microsoft services, and not just cash, might also prove astute. It cements the working relationship and puts the Rhapsody service in front of millions of MSN users, giving it a leg-up in the fight with Apple’s iTunes. Glaser’s battle with Microsoft would have made him a natural ally of Apple’s chief, Steve Jobs. But he criticises Apple for adopting closed technologies instead of open standards. ‘Microsoft takes a very wide approach to licensing its digital rights management software. It is vexing that Apple has taken a closed approach.'”
Pritchard reports that Glaser “believes handset firms and operators will pick Real as its software is open and plays a range of file formats – something the Microsoft agreement only strengthens. That, he adds, is in contrast to Apple’s strategy. ‘The Apple-Motorola phone could be a train wreck. Apple’s deal with HP [to sell iPods] was a train wreck. That end-to-end approach to designing the customer experience can be effective early on, but over time it will lose out because of the share of market forces against them.'”
Full article here.
Advertisements: The New iPod with Video. The ultimate music + video experience on the go. Buy it now at the Apple Store. From $299. Free shipping.
Apple iPod nano. 1,000 songs. Impossibly small. From $199. Free shipping.
On October 27th, RealNetworks announced their earnings results for the quarter ended September 30, 2005. Real reported revenue of $82.2 million and net income of $11.2 million. Real’s music revenue totaled $25.0 million for the quarter.
On October 11th, Apple announced their earnings results for the quarter ended September 24, 2005. Apple reported revenue of $3.68 billion and net income of $430 million. Apple’s music revenue totaled $1.477 billion for the quarter.
How much time does Glaser plan to spend catching Apple exactly? Is Krispy Kreme now fortifying their donuts with some industrial-strength vitamins and life-extending gene therapy? In the last quarter, Apple matched Real’s entire quarterly revenue of $82.2 million in about the first 49 hours of the quarter. In the last quarter, Apple matched Real’s total quarterly net income of $25 million before lunch on the 2nd day of the quarter. In the last quarter, Apple matched Real’s music revenue of $25 million right around the 36th hour of the quarter.
Related articles:
Apple’s ‘pure genius’ will soon make iTunes’ portal the ‘number one destination on the Internet’ – July 26, 2005
Related MacDailyNews articles:
Real CEO Glaser calls Apple ‘deceptive’ with iTunes Music Store – March 07, 2005
Real CEO pitches to half empty room at tech symposium; Apple draws standing-room-only crowd – February 25, 2005
RealNetworks’ CEO Rob Glaser grabs 3 of top 10 spots on ‘Dumbest Moments in Business 2005’ list – January 31, 2005
The de facto standard for legal digital online music files: Apple’s protected MPEG-4 Audio (.m4p) – December 15, 2004
Real’s CEO Glaser: ‘Harmony’ hack legal, Mac lovers are very sensitive to Apple criticism, and more – September 14, 2004
Analyst: Rob Glaser’s ill-advised war against Apple ‘is going to bite RealNetworks on the ass’ – August 30, 2004
RealNetwork’s CEO Glaser crashes Apple’s music party – July 30, 2004
Real CEO Glaser: Steve Jobs’ comments on Real ‘not succeeding’ are ‘ridiculously humorous’ – April 29, 2004
NY Times: Real CEO Glaser was close to having ‘iPod’ before Apple, but let it ‘slip through his fingers – April 24, 2004
Real’s CEO Glaser: Apple’s iPod/iTunes combo ‘threatens to turn off consumers’ – April 20, 2004
Jobs to Glaser: go pound sand – April 16, 2004
Real CEO Glaser begs Apple to make iPod play nice with other music services – March 24, 2004
Real CEO Glaser: ‘iTunes is only going to be used for playing songs you bought using the iTunes store – January 16, 2004
[sarcasm]Yeah, mhm sure[/sarcasm]
What a maroon!
(ain’t I a stinker?)
Apple does need to be very aware of how many companies ARE aligning themselves on the “other side” of the digital music biz with MS, and perhaps pursue more deals with others like Motorola and perhaps even start licensing their DRM if market share shoud dip just slightly.
While I love the fact that the iPod + iTines work together so well, getting more partners on board would also be a good thing to help Apple stave off Bill+everyone else.
Unfortunately the mount of money that “everyone else” can throw at this to come up with something that works as well (or close enough) is much larger than Apple can muster.
I’d hate to see Apple go from a leading position to being an also ran becuase of a lack of licensing of the DRM.
Great take MDN!
I agree with toolazytotell, Apple hast to make deals just to make Fair Play the standard in Music + DRM, everybody says that Apple doesn’t license Far Play because protect the iPod, but people will still buy iPod if the DRM is in other players or music stores because they are cool, people will still use Apple iTunes Music Store because is the bigger and easiest of all the stores. Consumers doesn’t care about the DRM behind
Usually when a ship is sinking most rats jump ship. But not Rob “Second Helping” Glaser.
“Glaser’s decision to opt for access to Microsoft services, and not just cash, might also prove astute.” – Pritchard
Uh Uh.
Wake me when any car companies make special options available for Real™ enabled mp3 players.
If Glasner was responsible to his shareholders, he would have taken all that $761 million and gone into another business sector. One where he can give them a “real” return on their investment.
That is trucklaod of money, and money is power. The power to make more money. Unless your Glasner. He’s gonna piss it up against the wall.
MDW: “Sell” as in “Shareholder should sell now”. This seems to be as good as it’s going to get folks. It’s all downhill from here.
Uhm, doesn’t this lawsuit settlement also mean that Apple can now sue MS for the same anti-competitive reasons that Real sued MS? Locking out other media software in preference of its own? Isn’t Quicktime the 3rd media software besides WM and Real’s? Wasn’t Quicktime just as disadvantage as Real, by MS’s tight bundling of WM to its OS?
Didn’t Cringely write about this lawsuit being better for Apple than for Real, over a year ago, as Apple has more to gain than Real, if Real were to win?
“Apple iPod+iTunes ‘will lose out because of the share of market forces against them'”
That’s like saying that Microsoft Windows will lose out because of the share of Linux market forces against them. A bunch of small competitors taking up a tiny fraction of the total market will only harm those small competitors, not Apple. They will only take market share from each other, and the resulting confusion may actually lead to more people purchasing iPods, as they are the safe bet.
This is of course barring the off chance that one of these companies has an epiphany and releases a product that is truly better than the iPod. And then they would have to convince the teeming masses of iTunes users to repurchase all their music to make it compatible with their player. That’s a lot of people who would have to make a significant investment to make their songs compatible with their amazing audio player.
“Microsoft takes a very wide approach to licensing its digital rights management software. It is vexing that Apple has taken a closed approach.”
Apple’s closed system is their best advantage. Millions of people are pretty much locked in to their hardware AND software. To say the the closed system is a disadvantage is ridiculous.
“That end-to-end approach to designing the customer experience can be effective early on, but over time it will lose out because of the share of market forces against them.”
Actually, the closed approach is least effective early on. To have a small portion, say 5% of the market, locked in to your product means nothing. It is only when you have a significant portion of the market locked in to your hardware, software, etc. that the closed approach works.
You buy an iPod and plug it into iTunes on your PC …. it just works. nuff said.
Current total global sales of the iPod approximately 28 million, potential projected sales for the run up to Christmas 2005 are 9 MILLION units. The iPod commands approximatley 75% of the overall global market of MP3 player sales with over 1000 3rd party ad ons from OEM car manufactures such as BMW, Toyota and Alfa Romeo and others. 3rd party manufactures such as Bose, Gucci, Prada, Burton, Altec Lansing and a whole bunch of others.
http://www.time.com/time/business/article/0,8599,1123046,00.html
Featured in Time magazine
Logitech Wireless Music System for iPod
A great way to stream music from your player to your audio system
http://www.smh.com.au/news/livewire/moveable-feast/2005/10/25/1130239525389.html
“iPod, Therefore I Am” ran the ruminative headline in an issue of Newsweek last year.
It was an important signpost that Apple’s glossy white digital jukebox for the pocket had culturally arrived.
The electronic device for iPod aficionados has become like a flame to which manufacturers have been irresistibly drawn, producing all manner of accessories and peripherals to hang off its phenomenal success.
And in turn, the availability of extras has added value to the iPod.
Today there’s an avalanche of accessories available, from wireless headphones and radio attachments to external microphones and car kits. Of them all, the compact speaker system, or docking station, is among the most practical.
A speaker dock transforms the iPod from a device used for listening on the move to a near-essential piece of home-based entertainment.
The iPod is not going to die anytime soon, Keep stuffing those donuts Rob
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quoting Rob ‘double-dip’ Glaser, from TFA: “It is vexing that Apple has taken a closed approach.”
perhaps we should start a list of other things that Rob finds vexing:
1. That men’s dress pants don’t come with elastic waists
2. That McDonald’s insists on capping its offering at Extra Large, when his shirts come in XXL, XXXL etc.
3. That consumers don’t understand that “buffering” time is a perfect time to refill your plate
did i miss any?
Isn’t Galser gross? A fat ass slob.
Nice spelling ‘E’
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Its Glaser. And yes Rob GLaser is a ‘fat ass slob’
I don’t understand MDN’s take on this article — so basically Apple’s revenues are greater than Reals? But where’s the commentary?
I mean, Dell and Microshaft have market capitalizations that far outweigh Apple, yet the smaller company is obviously kicking butt.
So, what’s the analysis of the financial numbers? Is the Real company revenue falling through the floor, bleeding cash which it will not be able to sustain? Are their company revenue charts pointing straight down and out?
???
Isn’t this kind of behavior called the “Stockholm Symdrome?”
While I support and believe most of MDN’s and their reader’s comments, I fail to see how any referrals to Glaser’s weight problem have anything to do with the topic. What he says and how he acts are all fair game, but to have to launch an attack on his appearance seems very childish. Surely you have enough ammo to support your opinions without having to resort to that, right?
Of course, the other side of that coin is that his appearance IS due to the way he acts (at KK).
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There are only two threats to Apple that I can see,
1) is to not progress on building the best portable MP3 experience (both player and client app). From all reports, the iPod + iTunes combo is at least 50%-100% better than the rivals at a similar competitive price.
2) the record industry cutting there nose off to spite their face. Should they feel that Apple’s influence is becoming too strong, they may choose to take a hit and stop supplying to Apple in order to diversify the competition.
All these anti-trust cases against Microsoft are B.S. Microsoft will eventually fall because a lack of creativity and excess flaws that plague their products, not from strategic moves like bundling pieces of like software. It’s easy to throw stones at the top, however Apple is much more drastic in this approach. They try and succeed in covering many grounds in terms of software, but since they hold a much smaller market share, nobody cares. If Apple were ever to gain a majority of the market, we could expect the same things to happen to them. The government should stay out of the economy as much as possible. The people will ultimately decide where their money is spent and which products to endorse. Any company holding power has that power because of us.
SR, if Apple would start violating anti-trust laws or using its position in the market with the iPod + iTMS to keep competitors out of the digital download market they would be to court in the blink of an eye.
Apple has 80% of the digital market share and it is not forcing anyone to use its technology nor anyone is forced to kneel down in front of Apple to ask for Fairplay license and a slice of iPod market in order to sell music downloads. The market is open and Apple is the market leader not because they are the gatekeeper but because they sell the best products.
If you win the market because your technology and products are by far the very best and the market rewards you, you are NOT a monopoly nor a case for anti-trust. It’s called open market competition.
Monopoly is when by your very presence and by your very command of the ONLY available technology of a market you prevent others from entering it or force them to pay you fee to enter the only available technology in a market. Not the case with digital downloadable music market. No one is the sole owner of the only possible technology.
Conclusion: Apple could grow to 99.9% of the market and not be case for an anti-trust lawsuit.
What is so open about Media Player ? You have to pay MS if you want to use the DRM. Apple chooses not to sell DRM right now. Big deal. I don’t see auto companys like GM crying about not having access to Porsche Engines. They compete in “their” market with “their own” product. Only in Tech do you see the lazy cry about not being able to “use” someone elses hard work to prop up their pile of stool product – by association. Too many useless dorks have made millions this way. Namely MS by “Riding the Bear” – IBM – for 15 years…only to emerge as the overall winner. Who ever bought a PC for Windows ? All they wanted was a cheap PC.
As a consumer I want a product to work as advertised. At a reasonable price. iTunes + iPod do that and more !! Nobody wants Glasers “closed” product that does not support the MAC. LOL !!! 2 can play at that game.
Apple & Google right now…along with Open Source Linux stuff…create much fear for MS. They can smell the scent of many consumers realizing that they do not need MS for anything. MS is lacking a cool factor that it had 12 years ago. Dangerous times for them indeed.
Every iPod sold is a potential person who finally says “…whoa this works and is cool, I thought the IT guy at work said that Apple sucked”
Smell the fear at Real and MS.
Apples been on top for 5 years. When is this ‘lose out’ supposed to happen?
It’s like Steve says “consumers have plenty of choices, but some people just like the choices they are making”.
Noone forces anyone to buy an iPod, and noone forces anyone to get their legal downloads from iTunes.
You can choose Apple or you can choose the hundreds of alternatives. If you choose Apple, their hardwareb and software works on both Mac and PC. If you choose any of the competition, you MUST use a PC, directly discriminating againts a minority group.
In this environment of massive choice, people choose Apple in overwhelming numbers. Why? Because monopolistic behaviour forced them to buy Apple? No, because they chose to buy Apple.
It doesn’t matter how big Apple get, they are not guilty of monopolistic behaviour, and they have created no barriers to entry to competitors inton the industry. I’m sooooo sick of hearing this uninformed, uneducated nonesense to the contrary!!!
Sorry about the typo:
“Consumers have plenty of choices, but some people DON”T like the choices they are making”.
But he criticises Apple for adopting closed technologies instead of open standards.
What?!! Apple is using an open standard; AAC (MP4), while Microsoft is trying to infiltrate the market with a closed standard; WMA with its “PlaysForSure” initiative -> on Windows-only!!,
Apple needs to open up to Linux to make Microsoft’s current offering to look even less relevant than it is now.
Apple, bring iTunes to Linux!
okay, that’s like the definition of a circle jerk:
Bill and Glaser having dinner at Bill’s house chuckling about ‘what it’s gonna be like when Apple loses’
“hyuk hyuk..ooh it’s gonna be amazing.. hyuk hyuk”
“they’ll never see it coming.. market forces i tell ya.. can you pass the syrup? …. “
right guys.. if Apple ever approaches the 60% level, they’ll lisence AAC+ and take over.
Apple intends to clamp down on the Fairplay DRM when the new MacTels arrive because only with hardware can a software DRM work.
Since the PPC chip doesn’t have DRM and the Intel chips do….
So with that in mind, and since Microsofts DRM is going to do exactly the same thing in Vista with Intel chips, doesn’t make a whole lot of sense to license the Fairplay DRM to hardware that will be broken next year and result in a ton of lawsuits.
People wonder why so many artists sign up to iTMS,
1: The iPod sells well
2: No subscription music, so the artists get a sale instead of nothing
3: It’s not Microsoft and their monopoly
4: Fairplay DRM secretly promised to labels and artists to get stronger over time using hardware.
IF the iPod+iTMS disappear, how long will it take one to clone the concept… AND do better, over a longer period of time, against these everlasting ‘market forces’ who’d probably want to raise prices ?
“Microsoft takes a very wide approach to licensing its digital rights management software.”
What? How open is Microsoft’s DRM? I still can’t use it on my Mac and neither can 17+ million other OS X users.
From the article:
Glaser’s battle with Microsoft would have made him a natural ally of Apple’s chief, Steve Jobs. But he criticises Apple for adopting closed technologies instead of open standards. “Microsoft takes a very wide approach to licensing its digital rights management software. It is vexing that Apple has taken a closed approach.”
Glaser believes that being open – and not tying his company’s software to one camp, be it Apple or Microsoft – will help it gain ground in new markets. Visitors to Real’s websites download one and a half million pieces of software a day, but that is dwarfed by the potential market in mobile phones.
—————-
If Microsoft has taken such a wide approach to licensing their DRM, then why does it not work on my Mac, nor the Macs of over 17 million other paying customers?
If Real is not tying its software to one camp, then why can’t I buy music from Real’s download service on my Mac? Why can’t 17 million other OS X users buy music from Real’s download service?
Are they trying to impress me as a customer by lying to me and the world with these kinds of statements?
Glaser? He’s still around ??
Apple will never license Fairplay because control of the user experience is what makes iPod + iTunes great. Consumers understand that, and this is one area, unlike computers, where it makes sense to have a closed system.
Ironically, though having a closed computer platform nearly killed Apple, it’s now insulating it from the PC price wars. Apple is the only manufacturer that can value-add with its own unique software.
Shall I order pizza, Rob?
-Can the pizza! Order the whole menu at Sum Yung Kook’s … Microballs caved and paid us out!
Does that mean I can keep my job at the end of the month?
-Oh yeah it does. Order me a Hummer and get yourself an Aztec too. Weeee’re baaack!!! And put the Rhapsody team back on full-time.
Both of them?
Cell phones… for cripes sake… When are they going to drop this ridiculous fantasy where the cell phone becomes everyone’s primary entertainment device?
Get this straight: almost everybody who owns a cell phone owns it for one reason only — to make calls. Every other feature (save maybe the basic PDA stuff) is just a novelty, a toy. People use these features, but they don’t use them a lot. For evidence, just look at the market.
— Cell phones take pictures. But digital camera sales are soaring. This implies that, while people like being able to snap spontaneous pictures with their cell phones, if they’re PLANNING to take pictures, they prefer a real camera.
— Cell phones play games. I notice that sales of Nintendo handhelds aren’t exactly suffering.
A cell phone music system will never replace a real computer+player system. Browsing a music store on that tiny screen will be a pain, and playing the music will drain the battery. Keep in mind that one of the primary reasons cell phones are viable is that you can keep them on for days at a time without having to worry about the battery. No one’s going to listen to music if it jeopardizes their ability to receive calls.
It’s just a joke. The fact that Apple’s competitors keep bringing up this non-existent “market” is proof that they’re grasping at straws. But given that straws are all that remain, I can’t say I blame them.
Apple should stay the route that they are going. If they don’t keep the large market share then the music companies will jack up the music price to at least 3-bucks per song. Apple is keeping the prices down so these idiots like Rob need to be happy that Apple iTMS is popular or none would be selling any songs.
If they do, Glaser should pass some on to Ballmer
Real? You still here?
LOL, great comment MDN!
I never value people who take the Digital Media debate and make it about the people involved (ie attacking Rob Glaser for his looks).
It seems to me that the Mac faithful have lost sight of something rather important. You have already lost once early in the battle for OS relevance from perpetuating a closed system. Why would you support doing so again.
Anyone who has used a streaming subscription service knows that Rhapsody from Real is an incredible product. This product will evolve and I predict that many of you, much like Jobs himself, will be surprised by the efficiency of it.
Realplayer is such a piece of shit it’s not even funny. Open standards my ass. Real was broke and about to take a nose dive down the business crapper. Glaser had no choice but to get in bed with MS (Mega Satan). Turds swim together.
I think the common denominator for all the music store wannabees is that they are all attached to the idea of making money off of virtually nothing. I’m referring to the “rent” music paradigm. I’m sure if some sales genius was screaming in my ears every day about “revenue streams” then I might buy the BS as well.
What’s great about Apple, iTunes and Steve Jobs is that the focus is on providing what the customer wants to buy and to do so in a simple, elegant manner. I think Jobs understands that if he ever loses sight of what the customer wants over what he wants then he’s lost the magic that makes him special in a world of Gates, Balmers and Glasiers.
Real Player on the Macs sucks so bad that I worry my powerbook might implode if I use it. Same for Windows Media Player. I mean, what kind of hardware do you need to get those awful apps to run quickly? For example, in Real Player, when I click the progress bar to fast forward I have to wait about 10 seconds for the video to begin playing. And this is on a 1.25Ghz Powerbook. Same with Windows Media Player.
I use QuickTime on occasion, but my favorite is MPlayer OS X because it’s fast and handles AVI files.
BG “OK Rob, if you go down on my MicroShaft and hum Dixie REAL good I’ll keep you around a little bit longer”.
Rob “Yes Mr. Bill”.
Balmy “and I’m next Robbie boy or else I’ll fucking bury you”.
You Rapsody users better grab up all you can eat while you can.
MW: club (as in Balmy gonna club you with an executive chair)
Heads in the sand, or so far up Job’s arse that you are unable to smell the music.
Subscriptions are rolling down the track like a freight train and you blind Mac kooks are walking with your back to reality listening to your ipods instead of listening to the approaching 200 tons of cold hard steel that is about to take you back to obselescence. Rembemer the mid-90’s, well that’s going to your reality once again unless you wake up and realize that open standards are the path to relevance.
I know that most of you on this board are actually open standards supporters, you are just lost in the short term hype of being the latest hip fad. Why is it human nature to focus on the short term and forget that this is a marathon, not a sprint.
Yo Rhapsody USER
Talk about having your head up your bum. 90% of the iPod “fad” market ARE PC USERS, turd breath.
“200 tons of cold hard steel that is about to take you back to obselescence” – OK numbskull, what’s this supposed to mean? Yahoo just doubled their prices. REAL is breathing through a snorkle and Napster is hemoraging cash. So just exactly where is this “cold hard steel” coming from? Please don’t bother to answer that.
The period in Apples evolution that fucked them was the late 80s not the 90s. It was the rotton leadership by John Skully and later Michael Spindler that put Apple down (but not out). Even with a full-on assault of anti-competitive business practices MicroShaft was unable to push Apple under.
I think Apple is quite aware that this is a marathon. That’s the reason they keep bulking the devices up with great new features in each revision. Was RIO part of the cold steel? Oh, that’s right… they’re gone and Creative will be following them shortly unless they drop their futile efforts and refocus themselves on their PC soundcard business. Oh that’s right, they’re getting their asses whipped on that too…..ha ha ha
Really, Rhapsody USER… why are you even here? Your BS stinks, but, I’m not getting any on me. Didn’t hurt! ha ha ha ha, what a loser!
Ut-oh, I better watch out because 200 tons of cold hard BS is about to…..
Rhapsody User
Apple can instantly switch on subscriptions to over 80% of the market the moment there is the slightest need to do so.
Instead of wasting your time here why don’t you go download all the music you can BEFORE REAL GOES OUT OF BUSINESS!
Oh that’s right… you don’t own the music so when REAL goes under your library goes with it. Or are you stealing the music with a sideways player?
Choo Choo. Stoking the engine. Choo Choo. Bend over for your Rhapsody subscription.
Market forces are actually WITH Apple at the moment as far as iPod/iTunes goes.
Rhapsody USER (AKA Rob Glasner)
Please tell that you will continue to invest all your savings in Real, and that you have never and will never invest a cent in Apple…LOSER!!
You’re going under faster than a turd tide to the mast of the Titanic!!
Isn’t MSN floundering badly in the market? Isn’t that why everyone is speculating that they want to buy AOL?
“It cements the working relationship and puts the Rhapsody service in front of millions of MSN users, giving it a leg-up in the fight with Apple’s iTunes.”
How does real get a leg up on iTunes. iTunes is seen by both Windows and Mac users. How do you think Apple has grown it’s music share to 75% of the total market Mr. Glaser? The whole market is seeing iTunes not just the Mac side. So your point is mute.
Glaser is on acid!!!!
I know this is way old, but does $25M in revenue for music subscriptions divided by 2.2M paid subscriptions equal $11.36 per subscriber in the quarter? And since a quarter has 3 months, doesn’t that mean each subscriber paid only $3.79 a month? I guess these subscriptions must be heavily subsidized and padded with college deals. If they considered a college deal, paid, then so be it, but $3.79 a month is dirt cheap.