RealNetworks unveils new media software

By Reed Stevenson SEATTLE, Aug 20 (Reuters) - RealNetworks Inc. RNWK.O> began offering new digital media player software on Tuesday that plays back music
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By Reed Stevenson

SEATTLE, Aug 20 (Reuters) - RealNetworks Inc. began offering new digital media player software on Tuesdaythat plays back music and video in all formats, including thoseof its main competitor, Microsoft Corp. .

RealNetworks is betting that the newest updated version ofthe RealOne Player software will become the central hub ofpersonal computer-based entertainment.

To make the new player more appealing to users, theSeattle-based digital media company said RealOne Player willalso be able to play DVDs and record, or "burn," music ontoblank CDs.

The software follows close on the heels of a new all-formatserver RealNetworks unveiled last month capable of sendingmusic and video over the Internet in all formats, and it alsocomes less than a month before Microsoft unveils its latestWindows Media 9 Series digital player software.

"The crucial thing is that it uses technology already onPCs to play back different formats," said Richard Brownrigg,RealNetworks' general manager of consumer softwaretechnologies.

RealOne Player requires the Windows media player as well asApple Computer Inc.'s Quicktime and other DVD playbacksoftware to be installed on the PC, so that it can harness thecapability for its own use.

Both RealNetworks and Microsoft have increasingly begun tooffer each other's formats on both its server and playbacksoftware as Internet digital media content proliferates.

RealNetworks shares closed up about 2.5 percent, or 11cents, at $4.50 on Tuesday on the Nasdaq, but are down bynearly a quarter this year.


RealNetworks, too, is hoping that the new player will boostsubscribers for its online contents service RealOne SuperPass,which currently boasts more than 750,000 paying users.

SuperPass users, who pay $9.95 a month for shows, musicvideos and songs, will get access to all of the features of thenew RealOne Player, including universal playback, advanced CDburning and enhanced content and features.

Users of RadioPass, a new $5.95 monthly subscriptionservice that was also unveiled on Tuesday, will also be able toplay music in all formats, RealNetworks said. A free, basicversion will still support DVD playback and CD recording.

"They're becoming a content provider," said Phil Leigh, ananalyst with Raymond James, pointing to the fast-paced growthin their subscription offering.

"I think RealNetworks has decided that it's not a safestrategy to try and become the standard player softwareplatform," he said.

Recent data by market researcher Nielsen Netratingssuggested that RealNetworks maintained only a narrow lead inthe competitive market for digital media players.

Microsoft said that it was confident that its upcomingSept. 4 release of the Windows Media 9 Series player, formerlycode-named "Corona" will be able to lure users away from theRealNetworks platform.

Michael Aldridge, lead product manager at Microsoft'sWindows digital media division, said that many of the featureson the new RealOne Player had already been available on thecurrent version of the software giant's player, including DVDplayback and CD burning.

"Without divulging the specifics we're going to continue torefine the all-in-one concept with the new player," Aldridgesaid, "in two week's we're raising the bar again."