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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

November 2, 2006 at 10:26 AM

RealNetworks Rhapsody phones on the way

RealNetworks will continue extending its Rhapsody subscription music service to new devices, including two categories of mobile phones over the next 12 to 18 months, Senior Vice President Dan Sheeran said today.

“You’ll see mobile phones come to market that fit both those categories,” Sheeran said during a presentation at the Northwest Entrepreneur Network’s “Entrepreneur University” event at the Seattle Sheraton.

Rhapsody will go onto phones that can stream music stored on the network — what Sheeran chacterized as the “celestial jukebox.” The music platform will also be used on phones that can both stream network music and play music stored locally on the devices.

The phones with local storage are likely to use flash memory such as the Micro SD cards produced by SanDisk, one of Real’s key partners as it moves its technology onto devices. SanDisk also manufactures flash-based MP3 players, including the first Rhapsody branded device introduced a month ago.

In his presentation on the role of platforms in business, Sheeran described how Real weighed different approaches for its new platform approach. It considered the closed-platform approach that Apple’s using with its iPod and iTunes and the more open approach Microsoft tried with its “Plays for Sure” digital music platform over the past four years.

Real tried to use Plays for Sure but the platform had technical problems with interoperability and limited how much Real could develop unique products, he said.

“What we found was when we were dealing with somebody else’s technology platform we were limited by innovation we were able to do,” he said.

“Even if it worked at an interoperability level it was going to lead to a lot of services and devices that all looked the same.”

That situation benefited the platform provider more than companies selling services based on that platform, he said.

Real realized several years ago that Plays for Sure wouldn’t prevail and Microsoft would go a different direction, which it’s now doing with the Zune product and its Apple-like closed platform.

“We knew that regardless of what they did we were going to have to get onto our own platform,” he said. “We thought it was only a matter of time before they made the shift they did.”

So Real developed what Sheeran characterized as a “hybrid” approach for its Rhapsody platform, similar to those used by TiVo and XM radio. Real maintains controls on copy protection and file transfer technology and specifies technology on the consumer interface such as the music guide.

“The goal is to define enough of the touchpoints between the different parts of the customer experience that we could really deliver on a brand promise if we put the Rhapsody logo on a device,” he said.

Microsoft’s mixed messages with Zune and Plays for Sure gave Real an opening to work with Best Buy, which is now the major outlet for SanDisk Rhapsody MP3 players, Sheeran said.

“Zune tells them that Microsoft doesn’t believe in its own Plays for Sure market,” he said.

As for competition going forward, Sheeran said Real faces “strong competition” from Apple and Microsoft.

“There will be more than one winner,” he said.

UPDATE: A little context, now that I’m back in the office. Perhaps Sheeran was expanding on what to expect from Real’s September acquisition of WiderThan, a South Korean mobile music company. Here’s Tricia’s write-up of that deal.

Comments | Topics: Apple, Gadgets & products, RealNetworks


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