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.
