Feeds

RealNetworks slides out of the red

Digital music strategy set to outweigh media streaming efforts

  • alert
  • submit to reddit

Secure remote control for conventional and virtual desktops

RealNetworks, the Internet media streaming market leader, has finally begun making money: its latest fiscal figures, released yesterday, showed a profit of $3 million for its third quarter on revenues of $34.9 million. This time last year, the company recorded revenues of $17.7 million (making for a 97 per cent increase year on year), and a loss of $2.5 million. RealNetworks' profit was knocked down slightly thanks to the company's acquisition of MP3 software developer Xing. Without the charge it would have posted a profit of $4.4 million. The company said growth had been strong across its product line, but it highlighted both its RealJukebox digital music system and the revenue it generates from advertising on its portal site, which grew from $2 million to $4.1 million. RealJukebox is central to RealNetworks' ongoing success, as other companies, most notably Microsoft and Apple, try to muscle in on the streaming market. Microsoft's pitch here is the way it can integrate its Windows Media Technologies into the OS and thus into a good proportion of the Net's servers. Apple, on the other hand, has been leveraging the open source movement, the very low cost of its media server and QuickTime's role to as the media creation standard. RealNetworks' profit suggests that both initiatives have yet to bite into its chief money-spinner: the hefty licences it levies for its server software. That said, Apple and Microsoft will begin to hit RealNetworks here, which is where RealJukebox comes in. By building up a significant userbase for RealJukebox -- 12 million users and counting -- RealNetworks is getting itself nicely prepared for the inevitable explosion in the digital music market. It's a canny move, since the Net music business will ultimately be worth much more than the streaming market, and will have matured long before the Net's available bandwidth can support Net-streamed video that's of sufficiently high quality to become a medium on a par with TV. RealNetworks' skill has been to leverage its RealPlayer userbase to promote RealJukebox to the point where it has sufficient critical mass to be the obvious choice for a music industry keen to offer a standard download and track management interface for digital music. No one wants a market fragmented by umpteen formats, and RealNetworks is one of the very few companies capable of offering a unified digital music front end. The big labels are likely to end up supporting RealJukebox -- if not by intent, then simply by default. So even if Microsoft and Apple -- or anyone else, for that matter -- cuts deeply into RealNetworks' streaming business, it really won't matter too much. Instead, the company can sit back and reap the rewards of a far more lucrative market. ®

Internet Security Threat Report 2014

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Special pleading against mass surveillance won't help anyone
Protecting journalists alone won't protect their sources
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Apple's iPhone 6 first-day sales are MEANINGLESS, mutters analyst
Big weekend queues only represent fruity firm's supply
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Bill Gates, drugs and the internet: Top 10 Larry Ellison quotes
'I certainly never expected to become rich ... this is surreal'
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
EMC, HP blockbuster 'merger' shocker comes a cropper
Stand down, FTC... you can put your feet up for a bit
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.