Fascinating RNWK dialog with analyst Steve Harmon. Reposted here:
Dialog took place on SI's Steve Harmon thread.
BAM
Steve's Comment:
Message 7842824
real has 3 businesses that is see:
* client software (50 million downloads)
* server software
* audio-video network aggregator
of the three i think the audio-video network is the most valuable, and probably more valuable than broadcast.com
but realnetworks MUST start thinking of itself as a net broadcaster and not a software company that has broadcast info
think service, not just software
having both sides makes rnwk better than broadcast.com IF real starts signing broadcast deals to send out stories, etc
aol needs real, i think, to bolster its platform dominance desire
***
BAM Comment:
Message 7848342
Fine on RNWK to a point, Steve H., but there's more:
Who ends up with WinAMP (Nullsoft) and MP3.com? Currently, loose missiles, but here to stay. WinAMP user base now exceeds 10mm, growing at 1.5mm/mo, moving toward streaming (Shoutcast), security and e-commerce capabilities. MP3.com going mainstream with Sequoia VC financing. Secure formats of IBM, T and Liquid Audio offer consumers low perceived value and are technically questionable.
Can't overemphasize the urgency to RNWK of dealing with MP3.
If RNWK doesn't take "ownership" of MP3, it loses control of the player. What follows is an incursion of third-party "player selectors" that recasts the whole desktop multimedia franchise. All of a sudden, RNWK's server side is "Balkanized"--no longer a "suite"--and the whole thing is up for grabs. As I see it, giving up mindshare is a potentially lethal mistake for RNWK. To secure it, RNWK needs to take over MP3 and do so now.
RNWK is to Net broadcasting what NSCP was to portals. Left it all on the table the first time around. Market so vast RNWK can reposition and relaunch, but brand and mindshare leadership defaulted to BCST. For reasons that aren't quite supported by the facts, you've always underrated BCST, a manifestly shrewd Net gorilla with killer instinct, dead-on aim, and elegant business execution skills. Nobody will catch Pied Pipers Cuban and Wagner.
You're right about AOL and ATHM as likely RNWK suitors. It'll take say, $5B without MP3, $7.5B with MP3.
Comments?
BAM
***
Steve's Comment:
Message 7858536
realnetworks should acquire mp3.com and winamp
otherwise they'll lose probably 30% to 50% of the future market for audio-video
i think mp3.com and winamp could beat real's player over time
these two (mp3.com and winamp) are viral
real still thinks of itself as a software company in the old-fashioned license game
the better model in my view is as a broadcast network on the web
the software is incidental to the network opportunity |
