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Summary:

Engadget points to a New York Times article about Real’s half-off sale. Given that record executives would pimp their mama out for dollars, it is clear that Real is eating all the costs. Wonder what it will do to Real’s bottomline next quarter. The 49 cent […]

Engadget points to a New York Times article about Real’s half-off sale. Given that record executives would pimp their mama out for dollars, it is clear that Real is eating all the costs. Wonder what it will do to Real’s bottomline next quarter. The 49 cent songs and $5 albums are ITunes compatible. Real has jumped onto the blogging bandwagon and launched Freedom To Choose blog. “We know that at 99 cents a download even Apple isn’t making much profit, RealNetworksmust be losing more than just a pretty penny on each sale. PaidContent estimates, “RealNetworks will be losing about 40 cents on every song it sells. The company plans to tell investors its music fire-sale could directly add about a penny a share in losses to its third quarter financial results, equivalent to about $1.8 million. (PaidContent has a dedicated page for Real.) “Apple fans, now’s your chance to put them out business!” writes Engadget. Gizmodo says this “could be the start of the first legal music downloading price war. Apple probably won’t flinch (yet), but hopefully this is a sign of lower prices all around in the near future.” I think this is the last ditch gamble for Real. If this fails, well it needs to go figure out a new digital music strategy. Also expect this to soon enter the halls of corporate cock-ups, aka 101 Dumbest Moments in Business, Business 2.0’s annual list, right next to the Roxio-turning-to-Napster disaster.

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  1. Charlie Sierra Tuesday, August 17, 2004

    Heck what’s to buy, the company’s products have already been open sourced.

    What’s happening to Real, is what should happen. This company annoys the crap out of me and many others, so I say good ridance.

    PS. Given the margins in digital audio, anybody want to take a whack at the margins in the new Sprint TV service, otherwise known as “basic cable for phones”?

    Considering the bandwidth that Video consumes, I wonder what will take priority, a premium ARPU video user or a lowly voice call. Hmmm, Welcome to drop city?

    PSS. Hope everybody has had a nice summer vacation.

  2. welcome back charlie and hopefully you had a nice summer vacation. well i don’t know what a summer vacation is, but that’s a whole different story!

  3. Real’s harmony and price cuts is a non-event. iTunes/iPod marriage is all about convenience. The reason most use iTunes IS NOT because free MP3 rips on PTP nets are wrong or of poor quality, but because iTunes is incredibly integrated, convenient and reliable. Price and compatibility will not change that equation. Most iPod users are not asking for choice (yet), so Glaser has jumped the gun in a desperate and doomed bid to save Real. iPod users are simply not thinking that far ahead. When Apple locks out Real, few iPod owners will notice except less than one dozen vocal media types who actually never used Real, but are in love with the idea. Glaser should check back in about two years if he still has a job. Real Who?

  4. I don’t think this will have much of an effect. After all, you’ll be stuck with Real.

    I think it’s time for Real to call it quits. It’s really not relevant anymore with Windows Media and Quicktime around.

  5. I agree. this company has lost its relevance and despite a headstart they have blown it. they made the same classic mistake – after getting people addicted to a free product, they started charging for not such a superior upgrade. it would have been fine, but there are options. i remember they bought an mp3 streaming company so long ago, that it makes me wonder why they did nothing to enhance that offering and basically go with the open-platform. they still could have been charging for their servers and for upgrades to that product.

  6. Johannes Ernst Tuesday, August 17, 2004

    Don’t you think that all of the latest Real/Apple spats are all attempts by Real to sell itself? To Apple, I would guess.

    Reminds me a little bit of the SCO plan, and it seems to work about as well as that one.

    What would your strategy be if you were Real?

  7. Not sure Real has many possible strategies at this point – they boxed themselves in as a distributor (after blowing the tech/software side), and a distributor, in the digital world, has very little value. I suppose they could buy Audible…but I don’t see any place for them to go – stuck between a rock and a hard place…

  8. Real’s strategy – well there is a sucker born every minute, and hopefully there is someone dumb enough to buy this company. who knows. anyway i think the clock is ticking very loudly on them and napster!

  9. Daaaaahh….

    How can you call the “Roxio turning to Napster” move a “disaster” when it’s just happened? What if this is the defining moment in digital audio history and Real actually beats Apple? What then, thimble butt?

    Idiot.

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