IBM, Real to Offer Digital Media On-demand

In a strategic agreement aimed squarely at Microsoft,
IBM and RealNetworks
struck a deal to provide businesses provide
subscription-based, on-demand digital video and audio services to their

Building digital media services from the ground up, which requires
integration with integration with billing and other services, is
labor-intensive, time-consuming and expensive.

The joint offering, announced at the Consumer Electronics Show, will help media companies cut start-up costs associated with forging a digital media service, which may include TV programming, mobile music services and in-car digital music from scratch.

RealNetworks plans to bundle its newly-announced Real 10 digital media platform with such IBM middleware as WebSphere
Digital Media Enabler, WebSphere Commerce and DB2 Content Manager.

Tony Rummans, vice president of business development, Information Management Solutions, IBM Software, said the deal was a no-brainer for Big Blue in part because of RealNetworks willingness to support open standards.

“RealNetworks is able to provide a solution for customer in multiple formats, and provides cross-platform access,” Rummans told “This is consistent with our own approach to open standards.”

The agreement, for which financial terms were not disclosed, is a showcase
of each company’s strengths. IBM is a leading provider of on-demand
computing infrastructure, while Seattle’s RealNetworks is a premier digital
media concern whose chief rival is the powerhouse in Redmond, Wash.

Redmonk Senior Analyst Stephen O’Grady praised the news.

“While this announcement may not have garnered that
much interest a year or two ago, anecdotal evidence like the success of
Apple’s iTunes music service indicates that consumers as well as
businesses are growing more comfortable with on demand media services,” O’Grady said.
“In that light, this announcement could be a good one for both parties.”

Consumer demand for accessing digital media through
PCs, consumer electronic devices, and mobile devices is exploding, with
companies such as Microsoft, RealNetworks and Apple fighting for customers
in a digital content distribution market that IDC expects to reach $1
billion by 2007.

RealNetworks’ Real software has long jousted with Microsoft and its
ubiquitous Windows platform in the battle for digital media supremacy, with
Apple usually coming in third.

By linking with IBM, RealNetworks is hoping it will get a leg up on the
competition in order to pipe its digital media to more media companies and network

Meanwhile, IBM continues to spread the gospel of its on-demand
strategy to provide computing resources on the fly — in a space rife with
competitors including HP , VERITAS and Computer Associates .

Using the framework created by IBM and RealNetworks, users can upload
content in fast and secure fashion and deliver it to a customer when a sale
is made. Clients can implement this in-house, or have it hosted by IBM and

RealNetworks, which launched subscription services in 2000 and has more than
1.3 million paying subscribers, unveiled Real 10 earlier this week. It
includes RealPlayer 10, RealAudio 10, RealVideo 10, Helix DRM and Helix
Universal Server.

In one example of how Real 10 may be used, it allows consumers to manage
their music library, as well as buy, transfer and burn purchased digital
music tracks in conjunction with RealPlayer Music Store.

IBM DB2 Content Manager helps store, search and retrieve files such as film
clips, video, audio, and business documents and link them to other digital
media applications. IBM’s WebSphere Digital Media Enabler and Commerce
software help media companies streamline operations.

The agreement calls for open APIs to allow customer support,
subscription management and security applications to work with the digital
media service, which will be available in the first half of the year.

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