RealNetworks' services gain traction

The company's earnings release shows there is considerable life at two of the first music and content subscription services online, but they still require close care.

John Borland Staff Writer, CNET News.com
John Borland
covers the intersection of digital entertainment and broadband.
John Borland
2 min read
RealNetworks' quarterly earnings release Tuesday gave an early glimpse into the health of two of the first music and content subscription services online.

Diagnosis: There is considerable life in the patients, but they still require close care.

RealNetworks' own GoldPass service--relaunched as RealOne late last year--passed the half-million subscriber mark by the end of December, the company said. This comes despite the end of baseball season, which had threatened a subscriber list heavily populated by people listening to live major-league games.

"We're continuing to show significant growth," said Larry Jacobson, RealNetworks' chief operating officer, noting that advertisers and other media companies are paying closer attention. "People are looking and saying, 'They've reached half a million (subscriptions) without a lot of content. How fast is it going to grow now that it has more content?'"

The RealOne and GoldPass services together attracted about $10.1 million in revenue over the course of the fourth quarter, the company said. That figure is evidence that there have been some cancellations in the service. But Jacobson said cancellations have decreased since RealOne introduced new software and a larger array of content, and haven't been high enough to significantly slow growth.

RealNetworks' earnings report also gave a peek at the financial figures behind MusicNet, the online music subscription service jointly owned by three major music labels and RealNetworks itself.

The company said its pro forma MusicNet equity losses from last year totaled just over $4.6 million. RealNetworks owns roughly 40 percent of MusicNet.

The company declined to say how many people had subscribed to MusicNet, which is carried through RealNetworks' own RealOne Music service and through America Online.

MusicNet, which competes with Pressplay, Listen.com's Rhapsody and several other upcoming subscription services, is limited solely to music. RealNetworks' broader RealOne service features video and radio content from TV stations, radio broadcasts and other sources, much of which can't be found elsewhere online.