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

20 years ago

“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.

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