AOL media player goes mainstream

With the addition of video playback and streaming, Winamp graduates from being a mere audio player to a full-fledged media player. And with its current ability to stream Microsoft's Windows Media formats, and its intention to add RealNetworks formats, Winamp could put AOL Time Warner in a position to muscle its way up in the fight for media player dominance.

Should a video-enabled Winamp start to cut into the market share of its media player competitors, that could spell trouble for a key alliance forged between AOL Time Warner and RealNetworks to thwart Microsoft's aggressive media ambitions.

"I think AOL does want to be in the top three, absolutely," said Yankee Group analyst Mike Goodman. Winamp3 "positions AOL to have its own product to compete against Microsoft. But the interesting thing to watch is the impact that this has on AOL's relationship with Real. Does this create a schism?"

RealNetworks and AOL Time Warner collaborate on a number of media fronts. The latter claims to be one of the largest licensees of Real technology, and the Winamp-based media player in AOL Time Warner's proprietary online service supports Real formats.

Winamp3, however, does not. An AOL Time Warner representative said the company was "actively working with Real to permit support for Winamp" but would not say whether that work was strategic or technological.

RealNetworks declined to comment.

"Having a single player that plays both (Windows Media Player and RealSystem) formats and puts audio and video in one place, would be a benefit to the market," said Goodman. "And Winamp is a fairly popular player unto itself. So it opens up new potential markets for AOL."

But other analysts said that no matter how popular Winamp became, the company could provide only a symbolic entrant into the streaming market because it did not promote its own format or generate significant income.

"The key behind Microsoft and Real and QuickTime is that, while they support other formats, they're making money by selling their servers," said Jupiter analyst Michael Gartenberg. "A media player that does nothing but play back other formats doesn't offer much in the way of revenue. This is a way for them to provide media services as part of the AOL experience without being beholden to Microsoft."

Winamp was something the company picked up, Gartenberg said, "at the heyday of the MP3 craze when people paid for these types of products. Now it's more of a feature set than anything else."

AOL's proprietary service counts 35 million subscribers. Versions 6 and 7 have the AOL Media Player, but AOL would not say how many of its subscribers were using those versions.

No worries in Redmond
Microsoft, which plans to launch a new test, or beta, version of its Windows Media Player on Sept. 4, shrugged off any threat from AOL Time Warner and Winamp to its own player. It pointed to Winamp's support for the Windows Media formats as a strategic plus for the Redmond, Wash.-based company.

"The release of Winamp3 is proof that Microsoft is realizing one of its key goals for digital media--to deliver technology that others can build on in creating their own products," Jonathan Usher, director of the Windows Digital Media division, wrote in an e-mail. "For example, Microsoft has worked to ensure that it is easy for developers to build support for Windows Media playback into their applications. So we're pleased to see the addition of Windows Media Video playback as a key feature of Winamp3."

RealNetworks recently released significant parts of its technology to an open-source development organization called Helix in order to give developers of devices and applications more freedom to build support for Real's formats. AOL Time Warner called it "too early to tell" whether Helix would permit Winamp to add Real support.

Meanwhile, Winamp3 supports a long list of audio and video formats, including MP3 and MP2; MPG and MPEG; Microsoft's WMA, WMV and the ASF; the open source and patent-free Ogg Vorbis audio format; MIDI (musical instrument digital interface); and others, as well as its own Nullsoft Streaming Video, a codec-agnostic video format.

The player does not support MPEG-4, a widely touted multimedia standard, or Apple's QuickTime format.

In addition to the video capabilities and attendant strategic complications, Winamp3 introduces a number of new features. Nearly a year after its release in a beta version, Winamp3 launched with features that let users change not only the look and feel of the application, but the user interface.

AOL Time Warner credited the program's flexibility to "Wasabi," a new media software developed by Nullsoft, which created the popular Winamp media player and is now a unit of AOL Time Warner. Nullsoft's Wasabi has no connection to Wasabi Software, which makes 3D rendering software.

Wasabi is both the kernel of the new Winamp and a development environment for building around that kernel. Winamp enjoys a large following of developers who design "skins"--essentially the look of the player--as well as functional plug-ins.