In a keynote presentation at NAB, Rob Glaser, founder of RealNetworks, explained that their streaming media company was created ten years ago on the premise of internet digital media everywhere at a time when the web was extremely primitive. The relevance of the appearance of a streaming media player at a broadcasting convention may be found in the experience of the music industry which largely failed to react to the threat of the internet. With the adoption of broadband now reaching a tipping point, online distribution of movies already represents both a threat and an opportunity.
The Chairman and CEO of RealNetworks observed that while the PC and TV are two different worlds today, the availability of high speed internet protocol delivery enabled programming that is open rather than controlled by a gate-keeping operator. Ironically he also used the occasion to promote Rhapsody, RealNetwork’s subscription music service, which he claimed was rapidly overtaking illicit file sharing networks, arguing that there is room for a legitimate online media distribution industry.
The challenge, noted Glaser in a gesture towards Microsoft and Apple, was to ensure that media players, devices and digital rights management systems interoperate to avoid creating a Tower of Babel of competing formats. The company has recently sought to work with these competitors with a view to regaining ground following the success of Apple’s ipod portable music player and similar devices. However, industry watchers might observe that despite releasing the Helix streaming media server as an open source platform, the RealNetworks solution is no less proprietary than those of competitors and despite its current market penetration is perhaps at most risk of becoming marginalised.
The task confronting the audio visual industry is to avoid ‘Napsterisation,’ referring to the problem presented to the music industry by the illegitimate distribution of digital media through peer to peer networks such as the original Napster. It is claimed that this cost the music industry ten billion dollars a year in lost revenue.
The solution is to come up with business models based on the increased control that technology gives consumers. Glaser observed that “Consumers love personalisation” and predicted that “Highly contextual advertising will be huge.” Pointing to the success of Google’s targeted advertising he envisaged that “New approaches to marketing and advertising succeed by using context to ensure relevance.”