RealTime IT News

RealNetworks Gets Behind Mobile Media Services

RealNetworks wants to port its expertise in desktop media downloading to mobile devices in the future.

RealNetworks is launching what it is calling RealOne Mobile Guide, which will deliver news, sports and other audio, music and video clips to users with sophisticated mobile phones and wireless devices that operate with some of biggest wireless carriers in the country.

The new service will work on Nokia's 3650, and RealNetworks also said it will work on PocketPC and other wireless devices in the future. Nokia's wireless handset is currently being offered by several carriers, including AT&T Wireless Services Inc. , Deutsche Telekom AG's T-Mobile and Cingular Wireless, a joint venture of SBC Communications Inc. and BellSouth Corp. .

In addition to lining up wireless network carriers, RealOne is also bringing together several content providers for its new mobile information and entertainment services.

"RealOne Mobile Media Guide includes programming from: Capitol Records, CNET Radio Direct, FOXSports.com, iFilm, NPR, PGA TOUR, Sporting News Radio, Triggerstreet.com and Virgin Records," the company said in a statement.

But while RealNetworks is putting emphasis on the mobile media market, one analyst, who is bullish on the company, isn't convinced the announcement will immediately translate into real revenues in the near future.

"This is early adopter stuff, it will not have material impact on revenues for this year or next," said Phil Leigh, vice president and digital media analyst for Raymond James & Associates. He said he owns 100 shares of RealNetworks stock, but Raymond James doesn't do any investment banking business with the company.

"These services are going to be much more popular in Japan, South Korea and other Asian markets, where the wireless infrastructure is more developed," said Leigh.

Leigh upgraded RealNetworks stock to "outperform" last week, and has set a price target of $6.50. He said the reasons he is optimistic about the company is because of its online media subscription service revenues and his belief that online music services are starting to gain traction.

"Mobile music has potential years down the road. It's hard enough to get reliable mobile voice service, so it could be some time before mobile music services take off in the U.S.," Leigh said.

"But there is a growing realization that online music is on the launch pad, and RealNetworks has a chance to be one of the leading players," Leigh said.

Leigh added that Apple's announcement that it has struck deals with some of the record labels for less restrictive licensing terms for downloadable music gives me reason to think the online music market is starting to mature.

In its latest quarterly financial results, issued April 29, the company said it now has more than one million subscribers to its various media subscription services. Leigh said it media subscription business is generating $25 million a quarter, or close to $100 million annually.

RealNetworks also said it is starting what it's calling RealOne Mobile On-ramp a program "that enables content providers to deliver programming to millions of consumers via their mobile phones and PDAs. Through RealOne Mobile On-ramp, content providers can extend their reach as well as tap into new revenue from subscription-based services. Content providers can easily encode their content in bitrates available over 2.5G mobile networks."

RealNetworks move to push media to the mobile platform is part of the company's "Helix Initiative - Enabling Expansion Beyond The PC." In the company's most recent financial results it said it is "already shipping with RealOne Player are Nokia's 3650, 7650, 9210, 9210i and 9290, and Palm's Zire 71."

In its latest results, RealNetworks reiterated its February announcement with Ericsson that the company's Helix media delivery technology will be incorporated in Ericsson's Content Delivery Solution. The company also said in March that it struck a deal with Openwave to have the RealOne Player to become a key module in Openwave's new Phone Tools v7 platform. RealNetworks said Openwave's software is included on more than 300 million mobile phones around the globe.