August 5, 2003 5:52 PM PDT
RealNetworks plays to Linux developers
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The Seattle company will announce details of the code-sharing plan at the LinuxWorld conference in San Francisco. With the source code, developers can build tailored versions of RealNetworks' audio-video player to run on Linux and Solaris systems. Linux is an open-source operating system based on Unix; Solaris is Sun Microsystems' version of Unix.
The code release complements RealNetwork's strategy to promote its multiformat system over proprietary systems, such as Microsoft's Windows Media. RealNetworks has taken this approach to try to recoup market share in the media software business that Microsoft has gained in recent years.
"We're not doing this as a defensive strategy, but as an offensive strategy," said Kevin Foreman, general manager for Helix technology at RealNetworks. "It is just another proof point of our commitment to open-source software and to the Linux community."
In the past year, RealNetworks has released the source code for its Helix video and audio compression technology and Helix DNA media servers, which support many file formats including MPEG-4 and Windows Media. Developers can use any piece of the Helix technology free for research, or license it to produce commercial products. Sony, for example, recently licensed Helix servers and audio-video codecs for its Altair home entertainment appliance.
The latest piece, called the Helix Player Initiative, gives developers a media player that will run on top of the Helix DNA Client. Still, it's a relatively new market for RealNetworks, and many Helix developer projects have yet to reach the market.
"The net effect is it extends RealNetworks' reach," said Michael Gartenberg, research director at Jupiter Research.
Matt Rosoff, an analyst with research firm Directions on Microsoft, doubts that the market is very large for a media player for Linux. "Among consumers, you still need a high degree of technical acumen to run Linux on the desktop," he said. "I don't know that it will have a big effect on Real's fortunes, but it is consistent with their mutliplatform strategy."
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CEO Rob Glaser focused on mobile media software for audio and video as a big opportunity for RealNetworks during the company's second-quarter earnings call. He highlighted recent deals with Nokia, Ericsson and Vodafone, which licensed the Helix Universal Mobile Server and Gateway for use in 350 million mobile devices.
Foreman also emphasized this opportunity. "Mobile and living room devices, those are hot areas of development for audio and video," he said. "There's not a monopolist there yet, and we are a citizen of the world there."
In addition, the company said it has already registered 200,000 Helix developers, a benchmark it had expected to reach by the end of the year. To encourage innovation among these developers, RealNetworks is establishing a grant program that will provide $75,000 toward advanced research. Recipients will be chosen among peers of the Helix developer community.
The Linux announcement comes two weeks after RealNetworks reported a second-quarter loss that was nearly double the loss during the same period in 2002 and was related to a one-time charge for excess office facilities. The company reported a net loss of $9.6 million, or 6 cents a share, compared with a loss of $4.9 million, or 1 cent per share, in the previous year.
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