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Summary:

The big Microsoft-Real Networks love fest, the hugs and kisses, is not about Bill Gates and Rob Glaser. Instead it’s about the Seattleites versus Steve Jobs, and what he has – the customers. They don’t. The two companies have tried their best to best iTunes and […]

The big Microsoft-Real Networks love fest, the hugs and kisses, is not about Bill Gates and Rob Glaser. Instead it’s about the Seattleites versus Steve Jobs, and what he has – the customers. They don’t. The two companies have tried their best to best iTunes and have failed. The consumer is voting for Steve’s products with his/her dollars.

To recap, Real Networks is settling the lawsuit it had filed against Microsoft for money …. a lot of money. If you read the press release you might walk away with the impression that it is $761 million. Let me just decode this PR speak. In reality, it’s for much less. Microsoft will pay $460 million cash and $301 million in soft dollars over next 18 months. A good chunk of the so-called deal is made up of notional dollars that is predicated on the notion that it is the amount Real would have had to pay if it wanted to get the privilege of getting a prominent position on MSN and also be the default online music subscription service for Microsoft. (Apple and Google would be a good match, but that’s a whole different story!)

I find it amusing that Microsoft would do a deal with Real, after all the bad blood. Back in the day, when Microsoft was not middle aged, and slow moving, it would have laughed in Real’s face, and tossed them out of their campus. Didn’t Microsoft cry foul and say it was giving up trying to do deals with record labels, because it was too tough? Is it just me or do others see this delicious irony.

Someone just quipped on IM that Microsoft and Real are like a potential couple who, to everyone else, look like a perfect match but are always fighting with each other, till the point when someone screams: why don’t you guys get over with and do what you need to do in the boudoir. I think after the first 18 months, Microsoft will take a stake in Real, and then swallow the whole kid-cabbodle.

On a more serious note, it does make me wonder if the streaming media is going to become a one-company game. I wonder if Apple would be gutsy enough to open-source Quicktime. I think Google and Apple would have to get cozy. Why? Because the $460 million of hush money could also put a shank in the toolbar deals between Google and Real Networks. I left a word with the Real PR…and hope to clarify this.

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  1. Kit and Caboodle?

  2. Australian Newsagency Blog Tuesday, October 11, 2005

    Government report paints a bleak future from 3G

    Courtesy of Om Malik I’ve got onto this research report (10 October 2005, no. 13, 2005–06) from the Australian Parliament. It’s a soberlng brief report on 3G and the challenges ahead for the players in the space….

  3. I used to use Real player a lot in the late 90s. Over time it has started getting more and more shitty, especially while trying to connect behind an office firewall. Completely stopped using RP now. WMP seems to work well enough for my needs.

  4. Does this mean Microsoft just shafted their other DRM partners…Napster, Yahoo, etc?

  5. Yahoo Blog Search Beta Released

  6. Apple should buy Real. Real’s market cap is $1.5b and it has some $800m in cash so the price would be marginal. This could jump start Apple’s subscription service which seems inevitable. All Real video content could be converted to QuickTime which would finally put the disgraceful Real client out to pasture.

    And the circus that would unfold with Steve and Rob together on stage would be priceless.

  7. With Apple getting into the music video over iPod business, it’s more important than ever for Microsoft’s business model that they branch out into IPTV. Any plans for Apple to bust into the TV-over-Internet business?

    Patrick
    http://channelchanger.typepad.com/

  8. moderately appealing writings of prurient interest Wednesday, October 12, 2005

    the whole shebang

    Allow me to humbly explain what Apple inc.did today. They unveiled the first generation video ipod. For the last few years, Apple has been talking out of both sides of it’s mouth, out of one side saying “we see…

  9. “Any plans for Apple to bust into the TV-over-Internet business?”

    They just did.

  10. I think streaming is quick becoming a one company game, but the standard looks to me to be WMA and not any Real thing.

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