RealNetworks Chair and Chief Executive Officer Rob Glaser is upbeat about the digital media market. And why not? His company just released a major update to its media player, complete with an online music store; announced growth in its subscription services; and unveiled a partnership with IBM to offer a digital media management system.
And speaking at this year's Consumer Electronics Show, Glaser did not feel the need to plead with Internet users to stop using file-swapping services to download music, which he did do a year ago. However, he did issue a warning to the film and video industry, which he says faces a surge in piracy if it does not move ahead with compelling online services.
After his speech, Glaser sat down with IDG News Service to discuss his company's announcements, the competition, and his presentation.
IDGNS: Why has the threat of piracy subsided for the music industry but not for films and video?
Glaser: There were more questions in music a year ago because piracy had gone on for so long, and when you have a curve like that you don't know what its nadir is until after you come back up.
We were confident that most consumers want to do things in a legitimate way if you make it easy, and have broad availability of content and flexible rules for the use of the content. Between what we have done with Rhapsody, what Apple is doing with ITunes and a couple of other examples, the industry is moving in the right direction.
It does provide a contrast with the film and video area, where ... the industries aren't moving fast enough to skip over the Napsterization step. The growth of video piracy is happening even as the music piece is turning. For video to avoid the trough that music went through, it has to get to that critical mass of great services faster than it is doing.
IDGNS: Hewlett-Packard announced it will release a digital music player based on Apple's IPod and preinstall Apple's ITunes jukebox software on its consumer PCs and notebook systems. Does that hurt RealNetworks?
Glaser: ITunes is only going to be used for playing songs you bought using the ITunes store or ripped using ITunes. What we have done with RealPlayer 10 by making it universal is create a solution that we think consumers will flock to. Imagine the situation when you buy a couple of tracks from the ITunes store, a couple of tracks from Napster, and hopefully you'll buy tracks from the RealPlayer Music Store. You want it to just work.
What Apple is doing reinforces format diversity. Even though Apple is narrowly focused on its one format, its success reinforces the need for people to take a universal approach. We're the only major player that does that.
IDGNS: Apple offers both the ITunes media player and the IPod hardware. Will we ever see a RealNetworks device?
Glaser: We're not likely to make our own hardware. We will have hardware partners who we work closely with to make sure that we deliver a great end-to-end experience. We are already doing that with Palm; we're working on that with Creative Labs. We will increasingly work with more and more device makers out there.
IDGNS: Some analysts see the announcement you made with IBM to combine your digital media technologies with IBM's middleware software as a competitive move against Microsoft, which has been pushing its Windows Media Server software. How do you see your partnership with IBM?
Glaser: We saw a big opportunity to help people build applications that are in a very broad range of categories. It could be subscription services; it could be stores; it could be an internal archiving application. We have always been interested in that element of the digital media market in addition to all these consumer products and services, and IBM has very broad reach. IBM is very strong worldwide and has particular presence in both the IT and line-of-business organizations of a number of media companies. We see significant opportunities in people who are traditional IBM customers, or traditional RealNetworks customers, or some of our joint customers, or new people who are getting into this and off the sidelines.