Interview: RealNetworks’ Glaser: ‘Consumers Still Tight With Money’

RealNetworks' Rob Glaser

Despite a revenue drop of 8 percent, RealNetworks (NSDQ: RNWK) not only turned a small profit this quarter — it grew sequentially for the first time in a year. “In the context of the current economic environment we’re in, we had a positive quarter,” CEO Rob Glaser told paidContent in an interview ahead of his call with analysts. But, he added, channeling a little of his inner Yogi Berra, “obviously, the economic environment we’re in is still the economic environment we’re in.” Does he see any movement out of it? “There’s plenty of cross currents. What we see is consumers are still very tight with their money. We see a lot of evidence they’re under pressure.” Translation: the subscription music and gaming business, which represents about 37 percent of Real’s revenues, isn’t turning a corner. (In fact, Real expects gaming and music revenue to be lower in Q4.) For the most part, he attributes this quarter’s better financial performance to cost cutting aka efficiency gains.

I asked Glaser if he saw a point where RealNetworks might be too small, might have to consider consolidation? (That’s the sale/merger euphemism of the week courtesy of Barry Diller.) His reply: “That’s a very abstract question. I think we’re focused on running the business and maximizing the opportunities we have in front of us. Clearly, the last year has been very challenging for pretty much everybody. I think we’ve probably fared better than most in the challenge. Being down 8 percent is not as good as being up but compared to a lot of industries it’s pretty solid, pretty stable.”

He added, “We’re in the process of moving toward the future.” That’s why today’s main talking points are about services around new platforms — and, without much detail, the news that Real has hired Hank Skorny as SVP- Media Cloud Computing and Services. He’s been working the company most of the year as a consultant. Glaser said he sees a “tremendous amount of opportunity” with the way people are using media across platforms, including Facebook and iPhone, but that anything specific would have to wait for actual product announcements. “There’s clearly a connection in our minds between the emergence of these platforms and the desirability of having richer, new forms of cloud services in the media space. That’s a fairly conceptual answer and it’s probably about as far as we’re going to go.”

IPhone-only app: Real has already expanded into the iPhone, with an app aimed at Rhapsody subscribers who want an integrated online-mobile experience. Glaser wouldn’t say how many free iPhone trials have converted to paid Rhapsody service. “We

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