Editorial: It's Been Real: Goodbye RealNetworks

With the recent release of Realplayer 8, yet another software company has outlined the path that it will follow to its own destruction. RealNetworks has managed to release a taste of a product, which may even be worse than the one that preceded it. Following the route taken by Netscape, they have innovated in a reactionary manner rather than by listening to the demands of their customers. RealNetworks may fall flat on their face quicker than Rudy Giuliani – although they would probably prefer facing Hillary Clinton rather than brutal onslaught of Microsoft. That is why they are positioning themselves to eventually be bought out.

A once useful media player’s standard installation was transformed into a bloated menagerie of components and add-ons with the release of RealPlayer 7. These needlessly suck away system resources and add useless functionality. RealPlayer 7 also featured an annoying system tray program, which was meant to serve two main functions. It tied services offered on Real.com and their partners’ WebPages into a neat, assessable, little bundle, and reduced RealPlayer’s load time. The “features” added to 7.x perpetuated this attempt to make the player load faster- well, at least in the mind of some developer. This tray icon was made more difficult to remove in the second release of RealPlayer – how nice. It would also be nice if the typical end-users had the knowledge to remove the add-ons (deals RealNetworks made with third parties to garner some short-term profitability), and knowledge of privacy depriving "features" (tracking the behavior and habits of users, and Comet Cursor ). All of these random add-ons and changes to the product hint at the lack of any clear strategy which the once solely dominant streaming media player will follow.

With the release of RealPlayer 8, a giant leap has been taken in the wrong direction- once again. All in all, this release is an attempt to duplicate the feature set of Microsoft’s new Windows Media Player (CD-ripping, streaming media, etc). The addition of iQfx 2.0 directly mirrors Microsoft’s bundling of SRS WOW! technology into its player. Given that this is a beta and little or no code optimization has taken place it is worth noting that Real’s new creation will improve – somewhat. In reality, too many components were welded together to make that an easy undertaking. Simply speaking, the code needs a major cleanup and probably should be re-written. The fact that a simple player takes forever to load and brings relatively new CPU’s to their knees is an obvious reason for doing so. Another area that needs some consideration would be the performance of its streaming AV capabilities in comparison to Microsoft. Yet, Real has decided on a two tiered strategy for their existing "flagship" product. They will attempt to take on Microsoft, and simultaneously attract users of slimmer, multi-codec supporting players such as Nullsoft’s (AOL) Winamp by adding more MP3 streaming functionality. Given its poor performance in either of these two categories, RealPlayer has become a jack of all trades and master of none.

What RealNetworks has mastered is the ability to manipulate its greatest resource of all – a large base of installations. It can be argued that they are simply aggressively marketing a full-featured version of the product by making a free player available. You can hardly find the complementary version’s download sites on their webpage. Though, what it comes down to is this: it is great if consumers buy RealPlayer Plus, but that only serves a secondary purpose. The additional sales supplement the income gained by deals based solely on their market share, and allow the company to have a net income rather than a net loss. This aspect is crucial for Real to enter into long term agreements with third party vendors and huge media empires. As long as RealNetworks can hold on to a large users base and provide features comparable to their competitors they will remain profitable. So, a feeble and desperate attempt is being made to do so in the midst of fierce competition. This attempt to "hold on" will be significantly aided by the self-updating abilities of their products and whole installation base, but will ultimately fail.

Microsoft will bundle the final version of its new media components with future releases of Windows such as Windows Me. They already include Media Player and its codecs with standard installation of Internet Explorer, Windows 2000, and recent releases of Windows 98. Another distribution channel exists for users of older builds of Microsoft OS's. This is called Windows Update. Microsoft has also produced incentives for users of Windows CE based handheld devices through optimizing its media products for these devices, and making desirable free content available. Microsoft has also developed a better product. The resultant of all of these intense efforts by Microsoft will be increased market share. RealNetworks will play a self-defeating game of catch up, and attempt to change their focus in response to actions taken by Microsoft and the changing landscape of the marketplace. Now that Yahoo! has injected itself into the mix, the market is more fragmented and Yahoo! will promote WM as the definitive choice for streaming media. Gradually, Real will lose its influence and fade away until a knight in shining armor comes along and decides that they need a product to compete against Microsoft. Then that somebody will buy them.