MediaMemo » Rob Glaser

RealNetworks Still Barred From the DVD Backup Business. Why Does RealNetworks Want to Be in the DVD Backup Business?

Peter Kafka — Wed, 12 Aug 2009 19:16:55 +0000

So now that the RealNetworks attempt to get into the movie-copying business has been rebuffed by a federal court once again, I’ve got a question: Why, exactly does RealNetworks (RNWK) want to be in the movie-copying business?

To recap: Real wants to sell a $30 piece of software called RealDVD that lets you rip and store DVDs on your computer. Real’s software adds its own set of locks to the ripped file to prevent DVD owners from passing along their files to someone else, but that isn’t nearly enough to placate Hollywood.

Real and the studios have been in court since last fall, when U.S. District Court Judge Marilyn Hall Patel issued a restraining order preventing Real from selling the software. Yesterday, Patel (whom you may recall from the old Napster days, when she essentially shut that service down) turned the restraining order into an injunction, along with a sharply worded ruling that basically described Real as a group of willfully obtuse doofuses.

Now Hollywood is dancing, and Real says it needs to “determine our course of action.” I have a suggestion for Real: Move on.

I know there’s a legitimate use for software that lets you rip DVDs you own–and more importantly, software that lets you circumvent the locks the studios put on their discs. But why not let the many other smaller companies fighting this fight, fight this fight?

Best-case scenario is that you end up with software that’s useful for a relatively small group of people: The ones who buy DVDs and want to watch them multiple times. Worst case is the one you have now: An expensive legal battle and the prospect of a product you’ll never be able to sell.

I’ve been puzzling about Real’s plan for this software from the get-go. Why release a product that is destined for a court battle?

A few people familiar with the company’s thinking have tried to explain that this fits into CEO Rob Glaser’s vision for Real’s future, which involves creating software that maintains a connected home entertainment hub. But that seems like a roundabout way to get there.

I have another theory: Glaser is a smart, pugnacious guy with a fondness for big public fights.

He spent some time in the earlier part of this decade jousting with Steve Jobs about Apple’s (AAPL) walled-garden approach to iTunes music, and lost that one. But he did get Microsoft (MSFT) to hand over $760 million to settle an antitrust case in 2005, and he still has a chunk of that cash in the bank.

Or maybe there’s an entirely different impulse behind RealDVD. But whatever it is, I’d love to hear it. Here’s a clip of Rob Glaser explaining the software’s features, but not the rationale behind it, to BoomTown’s Kara Swisher:

[ See post to watch video ]

RealNetworks: That Game Spinoff Isn't Happening (Obviously). But We Do Have Plenty of Cash…

Peter Kafka — Tue, 03 Feb 2009 12:47:21 +0000

Last spring, RealNetworks announced plans to spin off its fast-growing casual games business into a separate company. That’s not going to happen in the midst of a meltdown, and today the company formally acknowledged the reality: It says there’s “no visibility as to when conditions will support separation,” so it has called off its bankers and will write off the fees it has spent on the move so far.

That’s no big deal: RealNetworks (RNWK) is writing off all sorts of stuff. It will end up taking charges of up to $249 million when the company reports its fourth-quarter earnings next week, the company announced this morning.

It also narrowed its revenue outlook a tad: Real Networks had previously predicted Q4 totals of $150 million to $157 million; now it’s saying it those numbers will land between the $151 million to $153 million range.

Not included in Real’s kitchen-sink press release: An acknowledgment that it is laying off “less than 20″ people at Rhapsody America, the music subscription joint venture it runs with Viacom’s (VIA) MTV. Real had already canned 130 people in December (and yes, it will be taking a charge for those firings, too).

But here’s the interesting thing about Real, which has fallen off most investors’ and tech-watchers’ radars: At a time when all sorts of digital media companies are gasping for air, it has actual revenue-producing businesses (Rhapsody and its game units) and a pile of cash to play with–$370 million at the end of the last quarter. It won’t be a huge surprise if CEO Rob Glaser starts snapping up struggling start-ups that looked a lot flashier a year ago.

RealNetworks Cuts 130, 7.5 Percent of Workforce

Peter Kafka — Thu, 04 Dec 2008 21:10:14 +0000

Next up on today’s layoff parade: RealNetworks (RNWK), which is cutting 130 jobs, or 7.5 percent of the workforce. Standard explanation: The company is trying to “bring expenses in line with revenues in a time of economic turmoil.”

The layoffs are companywide. The company tells us it is not shutting down the New York office of Rhapsody America, the music subscription service that Real runs as a joint venture with Viacom’s (VIA) MTV as Gawker reported this morning. The corporatewide layoffs were first reported by CNET.

Other details relevant to laid-off employees:

All are on payroll through the end of the year
Each will be offered a cash severance package based on length of service
Said severance package will include six months of paid COBRA
Etc., etc.

Real PR boss Bill Hankes has more details at the company’s blog.