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For six years, the Internet Nexus served as my technology blog, but I've since started blogging at the SuperSite Blog instead. If you're looking for the blog, please head there. --Paul

Wednesday, August 18, 2004

The Real Music Man

CNET: "RealNetworks CEO Rob Glaser has survived longer than most in the Internet business, largely by pulling rabbits out of his hat when the competition least expects it. Glaser's latest surprise came a few weeks ago when RealNetworks announced it had figured out a way to re-create Apple Computer's proprietary technology for digital rights management--without Apple's permission. This allowed RealNetworks to begin selling songs in its digital music store that could play on Apple's hugely popular iPod, which no other non-iTunes store can do ... News.com spoke with Glaser late Monday about the company's vision of a Rosetta stone for digital music and his relationship with his opposite number at Apple, Steve Jobs ..."

Glaser on the problem Harmony solves: "We knew from a technology development standpoint how to do that kind of compatibility work. There is a tradition for it with Compaq, and actually even Microsoft has done some of it. So we thought there's a real emerging problem here and rather than just line up in a format war, let's try to rise above that. There were some significant technical challenges in terms of making sure that it would work and that it wouldn't feel like a science experiment to consumers. (But) our engineering team did a phenomenal job and implemented something that was smoother, faster, and more transparent than what we had hoped for."

On Apple's reaction: "Apple reacted in what I consider to be kind of a hysterical fashion, that created even more attention and visibility and awareness. I've become friends with this guy Al Franken. He wrote a book and called it 'A Fair and Balanced Look at the Right,' and I kind of feel like Apple Computer is playing the same role on this that Bill O'Reilly played in Fair and Balanced."

On trying to work with Apple first: "At the time I contacted Steve, we were well on the way--which is when he decided to do a Bill O'Reilly on us. At that point, we kind of kept our powder dry. We were asked, 'Can you explain, Mr. Glaser, why you sent that message to Mr. Jobs?' and we explained that we think compatibility and interoperability is good. And (we were asked), 'Now that he's told you that he won't do that, what will you do?' And I said, 'Well, we write software here, and we're just going to keep improving our software.'"

On Jobs leaking Glaser's response to the press: "Steve is a one-of-a-kind guy. You know that about him when you do business with him or when you work with him. I don't take any of that personally. My view is that we're doing something that's important for consumers here. The personalities make for interesting press, but the reality is that we were going to do what we thought was the right thing for consumers, in a way that we thought was completely in the tradition of well-established things like Compaq's compatibility for computers ... This a is case where we think we're doing the right thing for consumers and the right thing for industry, and it might well be the right thing for Apple. But we think it's going to happen in the long haul regardless."

On subscription services: " We still think that long-term, most consumers will have subscriptions. Long-term we think that we want to serve that kind of dial tone need for the largest base of subscription. What now have with Harmony are two things that are relevant. We have something that is differentiated and better. While we will license it to other people, we will license it on terms where if people use it and they pay us a little money for it and we multiply that by the volume of all the songs, that's great ... we will put relatively speaking more emphasis on (individual) tracks than on subscription than we had because we have a compelling differentiation in both those areas. But I think at the end of the day we will continue to focus very substantial amount on subscriptions. We have had great success with Rhapsody. Not only with the number of subscribers, but with how active they are and with the kind of feedback they give us."

On licensing Harmony to other companies: "[We are in] preliminary talks. We just introduced Harmony three weeks ago, and we're just releasing the RealPlayer with Harmony as a consumer product Tuesday, so any of the conversations we're in are in very preliminary phases."

On Sony ATRAC: "We support (the Sony music format) ATRAC. We have had interoperability for in-the-clear music with OpenMG-based devices, which is Sony's DRM, in the past, and we may well do that in the future. Today, Sony's hardware products for this market are not particularly significant in the marketplace. They still have some significant limitations, like they don't play MP3s natively. So the poor consumer has to transcode all their MP3s for these devices, which is kind of a backward way of looking at things. We think Sony's a terrific company and have a good relationship with them on a number of fronts, so I wouldn't rule anything out. But by covering Helix, and Windows Media and FairPlay or iTunes devices, we've covered 90 percent of the secure devices that are out there."

Excellent interview. Few people know much about Glaser, who started at Microsoft, but formed his own company when Microsoft refused to see the value in streaming media early on. He's a combative, vindictive, competitive guy. Don't expect him to back down in this fight with Apple.

[ Posted at 9:24 AM | Permalink ]