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NEWS FLASH May 7, 1999
And Now from RealNetworks, E-Commerce and Streaming Media
In partnership with two other companies, its technology will be used in direct-marketing E-mail
RealNetworks is on a rampage. On May 3, it launched RealJukebox, the company's new music playback software. Then on May 5, CEO Rob Glaser announced several other new products, among them a technology that makes it possible to search for audio and video content according to keywords; updates of the RealPlayer G2 streaming-media viewer, including the much-anticipated final version for Apple's Macintosh; and new server software for speeding up the delivery of streaming media.
RealNetworks also made a big splash with its new software for creating multimedia ads that can be incorporated into streaming media content. The idea, Glaser says, is for the ads to play seamlessly between Web presentations in much the same way TV commercials do during programs. The application also works with existing ad servers and services so that publishers can personalize and target ad content.
And now, in a move that hitches streaming media directly to E-commerce, on May 7 the company plans to announce a partnership called Buy@Once with two other Net companies to provide a technology that can embed a purchase offer into streaming media embedded in E-mail -- no need to click through to a Web site to complete the order.
"EFFICIENT HAND-OFF." With these last two announcements, in just one week RealNetworks appears to have edged ahead of Microsoft Corp.'s Windows Media Technology, its software for streaming audio and video on the Web, in the effort to combine marketing and E-commerce with streaming media. "This marks the beginning of the incorporation of [RealNetworks'] technology [with] multimedia presentations of products," declares Peter Zaballos, director of systems marketing at RealNetworks. The company's latest products will "help make for a more efficient hand-off between presentation and actual purchase," he says.
The new Buy@Once service is being developed by @Once, a San Francisco online marketing company that creates, tracks, and measures online direct-marketing campaigns for Web retailers. Through its partnership with RealNetworks, @Once hopes to entice consumers with streaming video- and audio-enhanced E-mail, then ask them to buy from within the text of the E-mail message. The point-of-purchase technology will be provided by a third partner -- Seattle-based EC Direct, which sells E-commerce software. Its clients include NBC, Gateway, and 3Com. Julia Adamsen, marketing vice-president for @Once, says the concept is to let consumers "see a product, engage it, then buy it in the fewest clicks possible."
"The big question with E-commerce is how to reach critical mass when it comes to transactions," says EC Direct CEO Dave Mullen. "We think the answer is to place points of sale all across the Web." Mullen declines to name the initial clients for the Buy@Once campaign, but he says they're in industries where multimedia is key, such as music, film, and games. The first campaigns are expected to be launched in six to eight weeks, he says. EC Direct will get a fee from @Once ranging from $1 to $3 for every transaction that results from the E-mail campaign, Mullen says.
HOW MUCH PER CLICK? And according to Mullen, every time a Buy@Once E-mail is opened and RealNetworks' servers stream a multimedia presentation, Real gets a fee of two to five cents, regardless of whether a transaction occurs. While not commenting directly on these fees, Zaballos says RealNetworks servers are usually used for free once a customer pays a one-time software license fee. That will be the case, for instance, with the new advertising application. However, he declined to say how much the advertising add-on fee would be. @Once's Adamsen says final decisions have yet to be made regarding RealNetworks' compensation, but whatever the outcome, "they're looking for ubiquity, and this [service] helps them achieve it."
While the new products and partnerships may bring RealNetworks closer to creating what Glaser calls a streaming media "ecosystem" (see BW Online, 5/5/99, "Rob Glaser: New Harmonies for RealNetworks"), the company's challenge is to do so without alienating consumers with unsolicited direct marketing.
@Once says its campaigns are targeted offers based on users' tracked Web activity, so the new service's media-rich E-mails won't be sent out blindly. Still, most people consider their E-mail box to be a private, personal place. So it's possible that users who don't usually object to banner ads or other forms of advertising might find unsolicited E-mails offensive, video enhancements or not.
"Consumers are already overwhelmed when it comes to E-mail," warns Mark Hardie, an analyst at Forrester Research Inc. "So if I were RealNetworks, I would be careful about the degree to which I was associated with a potentially annoying and intrusive use of E-mail. This kind of thing is likely to draw as much in the way of criticism as compliments." If this risk is real, clearly RealNetworks and its partners are ready to take it.
By Stefani Eads in New York
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