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RealTime IT News

AOL 9.0 Represents Streaming Sea Change

ANALYSIS: America Online's latest desktop software version 9.0 came out in beta this week, and the advances in its own Winamp multimedia player have some industry players convinced that its partnership with media player RealNetworks is in decline.

As testers poke through the beta and pore over the advanced version of the Winamp media player from AOL's Nullsoft division, they say that Real's technology is hard to find.

But a person familiar with AOL's plans disputed the speculation, insisting that the company's in-house media player -- dubbed AOL Media Player -- includes support for all the major media player formats such as RealNetworks, Microsoft's Windows Media Series 9 and Apple's QuickTime. Those formats will work alongside AOL's own proprietary streaming formats, such as .NSV.

The company's strategy is and has always been to make the media player effortless for the consumers, this person said of the AOL Media Player built into version 9.0. With AOL 9.0, the media player plays the widest variety of content, and no one player format is getting pushed aside, the source said.

Lisa Amore, a spokesperson for RealNetworks, said the company's technology enjoys the same prominent placement in the upcoming 9.0 version as it did in AOL 8.0, which defaults to the RealPlayer when an AOL subscriber launches certain audio or video files. Amore said the 9.0 upgrade automatically detects the RealPlayer that is installed in prior versions of the AOL service and upgrades the RealPlayer as well.

An AOL spokesperson declined to comment on the beta version, and on how extensively RealNetworks' technology is being deployed in AOL 9.0.

However, Doug McIntyre, CEO of video compression technology firm On2 Technologies , confirmed that the company's VP5 codec, which AOL licensed in April, is being deployed extensively in AOL's player.

"As far as we know, this is the first time we've seen it deployed," McIntyre told internetnews.com.

Licensing terms of the On2 deal let AOL distribute certain products and services to its subscribers that contain VP5 and VP6 encoders and decoders. It allows AOL to use the codecs on PCs and even on gaming and wireless devices, making it a safe bet that On2's codec has been fitted into the AOL Media Player to speed up video compression.

Since AOL began investing in building its own end-to-end multimedia player based on Nullsoft's Winamp technology, industry players have been watching to see how AOL's relationship with RealNetworks would play out.

Real's success with its fee-based RealOne service, which serves up a variety of content from various content providers, including AOL Time Warners' CNN and other media divisions, increasingly places it in competition with AOL's own broadband subscription service, which also hawks an array of exclusive content and services to AOL subscribers.

The question about how AOL will manage its relationship with Real isn't new. The talk started building well over a year ago, following a report in Fortune magazine (which is part of AOL Time Warner) that examined AOL's efforts to build its own end-to-end audio and video streaming player.

But another person familiar with AOL disputed that the company is distancing itself from RealNetworks. In some cases, AOL's broadband service does compete with the RealOne service, the person said, but in other cases, Real's technology is deployed in a variety of services.

Separately, AOL has created its own content-streaming technology for audio and video formats that works well on both dial-up accounts and on its broadband service. The distinction is key to the company's strategy of growing its broadband subscription base while, at the same time, offering broadband-like audio and video to its eroding dial-up base.

But the latest advances with AOL's Media Player signal that AOL is making sure that it is not completely beholden to one media player format. In the wake of the recent $750 million settlement of AOL Time Warner's lawsuit against Microsoft over its bundling strategy that stifled AOL's Netscape browser, AOL Time Warner has a seven-year licensing agreement to use Microsoft's Windows Media Player in upcoming media services.

That may help explain why the company is making sure that its own player becomes increasingly agnostic to different and often frustrating player formats that online media consumers have to contend with.

The online division of AOL Time Warner is expected to roll out AOL Media Player as part of its 9.0 version later this year.

Updates prior version

* Ryan Naraine contributed to this report.