Internet Pioneer RealNetworks Seeks Revival

SEPTEMBER 24, 2013, 9:00 PM

Internet Pioneer RealNetworks Seeks Revival

By NICK WINGFIELD

SEATTLE — When a ground-breaking product called RealPlayer was released in its earliest form in 1995, Steven P. Jobs had yet to return to Apple, Google’s future founders had only just met and Mark Zuckerberg was10 years old. Almost two decades later, RealPlayer, which practically invented the category of streaming audio and video over the Internet, is not gone, but it is largely forgotten. The same might be said for the pioneering company that created the software, RealNetworks, which helped midwife the Internet into its heady commercial phase.Now RealNetworks says it has reinvented its venerable software as a cloud service that will make it easier to privately share personal videos among mobile devices, television sets and computers. The change is a test of whether RealNetworks can avoid the tar pits by returning to a product that put it on the map in the first place.

“If we’re successful in this, we’ll make a successful company that could be even more successful than Real has been in the past,” Rob Glaser, the founder of RealNetworks, said in a recent interview.

The Internet is not generous to companies seeking rebirth. There are precious few examples of early online businesses losing their way and then finding it again — eBay and Priceline.com are two of them. Many more dot-coms vanished (Webvan, Kozmo, Excite@Home) or were absorbed into bigger companies before gradually fading away (Netscape).

RealNetworks was nearly wiped out after the dot-com bubble burst, when many of the companies that were buying its software to stream radio, sports matches and other events disappeared. It managed to hang on, winning a hefty antitrust settlement from Microsoft that padded its bank account. It got into a smorgasbord of new businesses, including subscription music, casual games and ringtones for mobile phones.

But those businesses fizzled, too, as RealNetworks failed to keep up with changing technology and tastes, including the growth of smartphones and a preference for free games that support themselves with the sales of virtual goods. Mr. Glaser, who stepped down as chief executive of RealNetworks in 2009, returned to lead the company in July of last year.

“When the board asked me to step in, we had multiple challenges to get on the right side of history,” Mr. Glaser said.

When he got back to the company, RealPlayer was being milked as a cash cow, supported by advertising and fees from companies like Google that paid to have their software bundled with it, Mr. Glaser said. But the company had invested little in it, not bothering to make a version for Apple’s iOS devices, for example.

RealPlayer has largely been overshadowed by other software for managing music and video collections on computers, as well as services like Spotify and Netflix that eliminate the need to store media locally. But the software still has 25 million active users a month, about two-thirds of them outside North America, according to the company.

With its new service, RealPlayer Cloud, the company is seeking to eliminate the hassles that can make sharing personal videos a challenge. Incompatible video formats on different devices can be a problem when sharing movies shot on smartphones. Stingy limits on the size of clips that can be sent via e-mail or text message are another.

Uploading clips to YouTube is a possible solution, though people need to figure out how to create a private channel for family and friends if they don’t want everyone to see their videos.

The RealNetworks offering lets people upload videos they shoot on their tablets, smartphones and GoPro cameras to an online service and then share them privately with others. The company is making apps available for the service so that it works on Android devices, iOS devices, computers and Roku set-top boxes, with a version under development for Google’s Chromecast media player.

It’s borrowing from the playbook of Dropbox and others by giving people two gigabytes of free storage for their movies and charging them if they want more space, with plans from $4.99 a month for 25 gigabytes to $30 a month for 300 gigabytes.

Mr. Glaser is technically the interim chief executive of RealNetworks, but he said he intends to stay at the company until his plan for reviving it begins to bear fruit. He said there is no active search by the board for a replacement for him as far as he knows.

“If it ain’t broke, don’t fix it,” Mr. Glaser said. “Right now we’re in the middle of a turnaround.”