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Summary:

RealNetworks (NSDQ: RNWK), which helps carriers sell ringtones, ringback tones and full-track music, believes the continuing trend in mobile…

imageRealNetworks (NSDQ: RNWK), which helps carriers sell ringtones, ringback tones and full-track music, believes the continuing trend in mobile content is to provide a bite-sized or “snackable” content experience, whereas the TV and PC will be the venues for longer, richer, high-definition experiences, according to Analisa Roberts, RealNetwork’s senior director of market planning and analysis. That’s not a new concept in the industry, however, the thinking has started to get muddled with new entrants, like mobile broadcast TV, which offers full-length shows and movies, and other content providers that see phones with big screens and faster network speeds as away to move everything from TV or online over to mobile without any alterations. To be sure, RealNetworks provides the range when it comes to music, by selling slices of music that are used for ringtones and ringback tones and also full-track music downloads. Here’s a snapshot of their thoughts on the matter:

On recent developments: About two years ago, RealNetworks acquired South Korean-based WiderThan for $350 million for its mobile music expertise and then more recently it bought Sony NetServices for $9 million to gain a European mobile music foothold. Last month, it gained recognition for launching an exclusive deal for Rhapsody with Verizon Wireless that includes both full-track and subscription music services.

Lots more, including thoughts on mobile music, after the jump

Mobile Music by the Numbers:

– Ringback tones: Ringback tones make up the bulk of RealNetwork’s business when counting subscribers. As of Q1, they had 16 carrier deployments in 10 countries with 28 million mobile subscribers, which mostly have subscriptions. “Our ringback tone subscriber base continues to grow at a great rate….It’s strong in the U.S. and Asia, but Europe is a focus and we are seeing traction there.” To give an idea, 10.5 percent of the global subscriber base has a ringback tone subscription. It’s particularly strong in Asia-Pacific, with the U.S. hitting 8.4 percent penetration. “It

  1. Oh my, these iPhone comments are so wrong, they are almost laughable.

    Specifically: "Apple will have to start looking at working with the carrier, but they really like their share of the profits."

    Earth to Real – the biggest revolution in mobile period was Apple moving away from this model, successfully.

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  2. Tricia,

    I like your pickup on 'Mobile Snacking' but disagree somewhat that what RealNetworks is doing qualifies as such. Ringtones and ringback tones to me represent service personalization that one does not change or snack on that often. Also, full track music downloads are still monolithic representations of their original form (with even say a 3.5 min song being a long time on mobile).

    I think Orange's newly introduced Zap! offering is closer to snackable media as a more purposed form of consumption for mobile (check out our recent blog on this subject here: http://www.azukisystems.com/index.php?/pages/p/snackable_selection_of_entertainment/

    We have yet to see the industry impact on rich media adoption from snackable forms of media that are easier to navigate, consume, share and socialize around. Once enabled at sufficient scale, we will also see the content ecosystem take on new formations and business models with stronger linkages among premium/paid, Web and user-generated content.

    John Tremblay
    VP Marketing at Azuki Systems

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  3. @John
    You nailed it. How can they be so dumb to not see the beauty of the apple appstore model?

    Also:
    "The new iPhone won’t lead to much more mobile consumption because most of the applications, including music and video, will only run on Wi-Fi networks"

    Duh!! What about the 3G network? This is worse that when Steve Ballmer laughed at the concept of the iPhone when he was asked about it.

    Time to short the RealNetworks, Inc stock, i guess :)

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  4. Correction: @John should read @Scott

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  5. I think that the growth might be the next best thing.

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  6. There are possibilities, but I don’t think Apple would ever want Rhapsody on the device. It’s a competing music experience. I agree with it!

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