Battle of the Streams Heats Up In Seattle

In a press release last week, Microsoft announced that its Windows Media Player 7 had received 3.4 million downloads in its first 10 days of release.

With such a strong release, the battle between Windows Media Player and Real Entertainment Center is heating up in Seattle.

“What we’ve seen over the last year or so, culminating with the release of version 7 of the player, is consistent growth, and more and more consumers and content providers as a format and as a player,” says Kevin Unangst, group product manager of the digital media division at Microsoft.

According to Unangst, this has to do with the company’s target. “We designed Window’s Media Player 7 to reach a different market — a wider set of users who hadn’t tried digital media before, and didn’t like that they had to have different interfaces — this was too confusing.”

Gary Cowan, Product Manager for Real, is not too concerned regarding the increased pressure from WMP.

Cowan sites Neilsen/NetRatings June 2000 data, which shows RealPlayer usage is at a rate 2.5x more than any other competing media player, and the lead has widened for the last 5 months.

The most recent data, since the launch of WMP7 have yet to be released to the public.

According to Cowan, there are two major drivers that have kept RealNetworks at the forefront of what’s going on. “Basically, there is just a lot more content out there in our format than any other format. Eighty-five percent of the streaming media on the internet is in RealNetworks format.”

In addition Cowan notes: “Our fundamental technologies are substantially better than Microsoft.”

However Unangst disagrees, stating: “At the core there’s also the Windows Media Player technologies, which is what the players built on, what the servers built on, and that’s where we have and continue to offer simply better audio quality.”

While Microsoft’s technology has continued to improve, many content providers are hesitant to leave Real.

“The reason why we started using Real was because Windows Media Technology was not together when we started developing,” says Joel Feldman, President of World Wide Broadcasting, an Internet radio network which uses Real exclusively. “Now Window’s has a very nice technology, their sound is very good and it’s nice and compressed. But Real also has more players out there and that’s probably the main reason why we’re still using Real, less people need to download it.”

As the two companies continue to evolve, however, changes may emerge.

“We’re not married to Real,” says Feldman.

One main concern for Feldman and others, is WMP7’s inability to operate within Windows NT or Windows 95.

“There’s a lot of people out in the business world that have to use NT, a lot offices have use NT as their platform, and the fact that Windows still has yet to come out with something that is going to work with their NT OS is kind of despicable to me,” says Feldman.

Unangst explains: “Looking at who we were targeting for the player, it was consumers that have an internet connection running a Windows operating system, and by far Windows 98, in terms of users who were connected to the internet, is the platform they were using.”

“The additional resources, as well as the percentage of customers, for example on 95 that were connected to the internet, was small enough that it made much more sense that the focus be on delivering the best experience on 98 and on 2000, where you had more hardware and a much larger percentage of customers connected to the internet.”

One feature that is drawing a number of content producers to Windows Media Format is the lack of a per-user server connection charge.

“If one were an entertainer, and wanted to offer a concert or radio station on the web, they wouldn’t pay Microsoft extra money if they had 10 people or 10,000 people connecting,” says Unangst.

Cowan feels that this is a pretty minor ad

vantage. “In general, the cost of the server software is fairly insignificant in terms of the amount of money people have to invest in hardware and bandwidth, and so forth. If you look at the total cost of ownership equation, the percentage of the cost that’s attributable to server software is small enough that the differences in technological capability seems to be more important than the cost associated with it.”

Whatever happens in the future, the battlegrounds are set in Seattle.

“The bottom line is that this industry is poised for explosive growth,” says Cowan. At this stage it’s all about growing the market. Developing the whole market is a very high priority for everyone in this space including ourselves and Microsoft. However, within that framework, there is no doubt that there are benefits to being and retaining leadership.”

“It is definitely a competitive environment, we are definitely competing with Microsoft, but we also have our eyes on building the market as a whole, and Microsoft has there eyes on the same thing.”

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