Blog Post

More Details On RealNetworks’ Deal With SanDisk: Rhapsody DNA

We mentioned last night about RealNetworks’ deal with SanDisk to release a portable music player…the portable subscription DRM that RealNetworks has developed is called Rhapsody DNA. The DRM will be used to deliver Rhapsody service to consumers via a broad range of portable, mobile, and in-home devices….SanDisk’s Sansa is the first one.
The Sansa e200 will come equipped with about 32 hours of pre-loaded music from the four major labels, EMI, SONYBMG, Universal Music Group, and Warner Music Group, as well as independent labels. The players also include recommendations, such as automatically updating with new music based on a consumer’s personal tastes and historical music preferences.
This says a lot about the relationship between RNWK and Microsoft, despite the big payment from the latter: “Although Rhapsody DNA can operate on devices that are compatible with — and include — Microsoft’s PlaysForSure platform, Rhapsody DNA does not depend on Microsoft technology in any way.” The Rhapsody DNA platform is based on Real’s Helix DRM.
RNWK is working with other hardware players to integrated DNA, and these include Sonos, the wireless music player.
AP: “We view this as a necessary step for RealNetworks to remain competitive in the music subscription business,” wrote Jeffries analyst Ross MacMillan in a note to investors. “Microsoft has followed Apple’s lead, with the vertically integrated Zune player, Nokia recently bought Loudeye to embed music services into its handsets, while Samsung recently signed a deal with Musicnet to integrate into its MP3 players.”
Staci adds: Real CEO Rob Glaser has been promising an end-to-end solution for a while although he was vague about the details during the recent 2Q06 earnings call, telling an analyst that was a topic for another day. That day is here but the question is did Glaser deliver something “very different from anything anyone else has done in music”? At the very least, it sounds like Real’s managed an end-to-end option that still repects the purchases and subscriptions of current Rhapsdoy and other PFS services. As Glaser said during that call, made as details of Zune started to swirl: “Microsoft has abandoned these guys. … That’s a great gift from them and we intend to capitalize on it.”