The suit represents a rite of passage for a company whose business model (handling the guts of music and video transmission) places it in the path of Bill Gates’s no-reverse-gear backhoe. The suit, combined with a European Union investigation of Microsoft’s practices toward Real Networks (basically, shutting out its software in favor of the Windows Media alternative), gives Glaser hope that for the first time Microsoft will be forced to compete on a level playing field. For its part, Microsoft dismisses the suit as “rearview-mirror litigation,” insisting that it hasn’t unfairly wielded its operating-system monopoly to snuff its Seattle-based neighbor.
Real’s balancing act is to insist that while Microsoft’s practices have cost it a fortune, the company is poised to win even without the courts. At this week’s Consumer Electronics Show in Las Vegas, “we’ll have our largest product launch in two years,” says VP Dan Sheeran. The specifics are under wraps but it’s reasonable to assume that they will include an a la carte online music store, upgrades to Real’s current products and improvements to the “codecs” which process digital sights and sounds.
It’s all part of Real’s grand strategy of placing itself in the center of the digital media world by having millions of consumers using its players and urging the big entertainment powers to encode their movies, songs and television shows with Real’s software. Success in this realm will allow the company to rake in royalties and, even more important, get the company’s DNA into countless computers, set-top boxes and mobile phones. That will help lure consumers into pay services for “premium” digital content, ranging from music to sports programming.
That wasn’t precisely the vision when Glaser started the company in early 1994. The focus was on selling high-priced media servers for commercial customers. When that approach stalled, Real began its drive to become the HBO of the Internet. Glaser has been relentless in forging deals for material that often matches his passions: baseball (first to show games on the Internet), bowling (he’s co-owner of the Professional Bowlers Association) and music (he idolizes Pearl Jam’s Eddie Vedder). The jewel of his content crown is last year’s purchase of Rhapsody, a rent-your-tunes music service he hopes to grow to a “jukebox in the sky” for tens of millions of subscribers.
Glaser admits that he might have held on to some of his billions had he sold out, or, like AOL, bought an Old Economy property when the bubble was bulging. Still, he professes no regrets. “In the distant future I think it’ll be the coming 10 years that we’ll look back on as the wildest,” he says. But don’t look for any brawls in the Mariners’ owner’s box. “The talk,” he predicts, “will more likely be about Ichiro’s contract.”
