RealNetworks doubled music services subscriber base in 2005, hits 1.4 million subscribers

“Seattle-based RealNetworks, which is one of several companies trying to win consumers over to a music-subscription service that competes with Apple Computer’s iTunes store, says it has doubled the number of paying customers in the past year,” Peter Kafka reports for Forbes. “Real said Tuesday that it had 1.4 million subscribers for its music services at the end of 2005, up from 700,000 a year before. The company said it had earned $312 million in 2005 on sales of $325 million. [Note: Real’s year-end results include a $478 million payment from Microsoft as part of an anti-trust case settlement… Real expects to receive another $283 million from Microsoft during the next five quarters.]

“Real makes most of its money selling consumers access to entertainment like music and games via subscription services, in which customers pay a monthly fee to ‘rent’ their entertainment,” Kafka reports. “…To date, Internet music subscription offerings like those from Real, Napster and Yahoo! have yet to take off – there are perhaps 3 million subscribers to Internet music services… Dan Sheerhan, Real’s senior vice president of consumer services, said the main hurdle facing subscription services is that the devices don’t work with Apple’s successful iPod line of music players, and that competitors haven’t come up with a device that works as well with Real’s offering as the iPod does with iTunes. That should change in 2006, he said, as Real works with manufacturers including Samsung, Toshiba and SanDisk to offer a competitive product. ‘We’re simply in a phase of the market’s development that we knew was going to come but we thought would be shorter than it has been,’ he said.”

Full article here.
Small potatoes — or, in this case, doughnuts. The also-rans’ annual mantra: “We haven’t come up with a device that works as well as the iPod does with iTunes. That should change in 2004, 2005, 2006…”

From RealNetworks’ press release: “For the fourth quarter, in the Consumer Products and Services segment, Music revenue was $26.1 million, a 29% increase over the fourth quarter of 2004; Games revenue was $15.7 million, a 52% increase over the fourth quarter of 2004; Video, Consumer Software and Other revenue was $22.6 million, a decrease of 10% over the fourth quarter of 2004; and Media Properties revenue was $9.0 million, a 55% increase over the fourth quarter of 2004. In the Business Products and Services segment, revenue was $10.2 million in the fourth quarter, a decrease of 8% over the same period in 2004… In 2005, revenue grew 22% to $325.1 million compared to $266.7 million in 2004. In the Consumer Products and Services segment, Music revenue was $97.5 million, a 50% increase over 2004; Games revenue was $56.3 million, a 63% increase over 2004; Video, Consumer Software and Other revenue was $95.0 million, a 2% decrease over 2004; and Media Properties revenue was $31.1 million, a 43% increase over 2004. In the Business Products and Services segment, revenue was $45.1 million, a 7% decrease from 2004.”

Real is like digital foot fungus; nobody wants it, it’s quite irritating, and, unfortunately, it just never seems to go away completely.

MacBook Pro. The first Mac notebook built upon Intel Core Duo with iLife ’06, Front Row and built-in iSight. Starting at $1999. Free shipping.
iMac. Twice as amazing — Intel Core Duo, iLife ’06, Front Row media experience, Apple Remote, built-in iSight. Starting at $1299. Free shipping.
iMac and MacBook Pro owners: Apple USB Modem. Easily connect to the Internet using dial-up service. Only $49.
iPod Radio Remote. Listen to FM radio on your iPod and control everything with a convenient wired remote. Just $49.
iPod. 15,000 songs. 25,000 photos. 150 hours of video. The new iPod. 30GB and 60GB models start at just $299. Free shipping.
Connect iPod to your television set with the iPod AV Cable. Just $19.

Related articles:
RealNetworks shares drop 9-percent on weak forecast – February 15, 2006
Oppenheimer downgrades RealNetworks based on Microsoft’s ‘URGE’ partnership with MTV – December 15, 2005
MTV-Microsoft URGE music service not targeting iPod, iTunes users; Real CEO PlayedForSure? – December 13, 2005
Real’s Glaser: Apple iPod+iTunes ‘will lose out because of the share of market forces against them’ – October 29, 2005
Analyst: Real and Microsoft deal ‘doesn’t change the dynamics for Apple in any way, shape or form’ – October 12, 2005
Microsoft to pay RealNetworks $761 million antitrust lawsuit settlement – October 11, 2005
Piper: Napster, Yahoo, MSN, Real fighting for small slice of Apple iTunes Music Store’s pie – September 16, 2005
Rob Glaser photo caption contest now open – June 30, 2005
Real CEO Glaser calls Apple ‘deceptive’ with iTunes Music Store – March 07, 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
Bono-Glaser photo caption contest now open – October 25, 2004
Analyst: Rob Glaser’s ill-advised war against Apple ‘is going to bite RealNetworks on the ass’ – August 30, 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


  1. In humans, the estimated prevalence of mental retardation is 2.5 percent of the general population. Mental retardation classified as “severe” is around 0.47 percent of the total population.

    The U.S. population is approximately 300 million people. Therefore, 1.4 million (300,000,000*0.0047) are naturally predisposed to be Real subscribers. I could have predicted Real’s music subscriber results years ago.

    Looking forward, I see limited growth potential in the U.S.A for Real. Short of reintroducing widespread use of lead-based paint in nurseries, their best hope for the future is to target the rest of the world’s severely mentally retarded now that the lawsuit settlement well has run dry.

  2. What percentage of that increased “user base” is from university/college students forced to pay usage fees along with their tuitions but never, ever use Real products?

    If there are 20,000 students paying for this service but never using it does Real count all 20,000?

  3. can everybody please remember that competition is healthy, and it keeps us from paying over the odds for our music and keeps apple on there toes, thus keeping i-tunes up to date and as good as it is, you cant praise apple for its music dominance and then heckle microsoft for its own dominance, just a thought.

  4. Only reason their subscriber base doubled is because they spent tons of money promoting their garbage on tv next to those annoying commercials.

    If it wasnt for money they got by suing Microsoft, they wouldn’t have a positive revenue.

    fact is.. This Guy is a pure retard ( real networks ceo ) and his company wont survive.

    DO NOT INVEST IN THIS COMPANY. they will go bankrupt in a few years.

    How do i know… simple… when Apple pcs take over.. he’ll have no where to put his software on to as easily as he was able to with windows/microsoft.

    This guy called Steve Jobs ” pig headed” and i dont think Apple will ever make any effort to make life easy for him(real networks ceo).

    So basicly, he has nowhere to go. He’s SCREWED. and so is his company.

Reader Feedback

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