"It's kind of a Soviet model," said Glaser, referring toin a remark that drew laugher from the audience here. "Taking secure music off the PC is a morass of incompatibility. This is not going to fly in the mainstream market."
RealNetworks has sought to position itself as a technology neutral Switzerland amid an array of competing and incompatible formats from Apple, Microsoft and others. RealNetworks' Helix multimedia software supports all major formats, but it hasn't won much support for its own technology among device makers.
The company hadwith a proposal to create a technical alliance that would allow customers of RealNetworks' music service to play songs on the iPod, to no avail. That could now force RealNetworks into a deeper relationship with archenemy Microsoft, which has won support for its technology on dozens of players and plans a major upgrade later this summer.
Glaser also advised Hollywood to avoid being too cautious in licensing its movies to Internet services, a mistake that could lead to a repeat of the music industry's run-in with online piracy at the hands of Napster and other peer-to-peer applications. Although legal film-download services are available today, they are hampered by limitations, including strict viewing rules for downloaded files, weak access to the latest films, and skimpy film libraries online.
Still, Hollywood has been reluctant to license movies online because of the failings of digital rights management technology to protect their content from piracy, according to many industry executives. Also, consumers are often unwilling to watch feature films on a PC.
Glaser said that the future of new media and advertising is personalization.
As a result, he played up a new partnership with Google, the No. 1 search engine on the Internet. Under the agreement, RealNetworks' RealPlayer 10, the company's latest audio and video playback service, will bundle in Google's search toolbar.
Glaser highlighted the growth and success of paid search, or contextual ads, which accompany Google search results. The market has taken off because sponsored search listings are highly targeted and personalized to what Web surfers are looking for, he said.
Glaser pointed to research that showed that in 2004, ad sales from paid search will account for about 30 percent of the $8 billion online advertising market. The Google-Real partnership will likely help RealNetworks capture some of those ad dollars.