“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.
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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
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?