Real-Apple: Can you say monopoly?

At Streaming Media East 2000: RealNetworks and Apple strike a deal to more tightly align 'the number one and the number two' streaming media player suppliers

What's the best way to combat Microsoft in the streaming media world? Take the number one and two streaming media companies and band them together.

At least that's the bet of RealNetworks and Apple Computer. RealNetworks chairman and CEO Rob Glaser used his Streaming Media East 2000 keynote address here Monday to announce that Real is building support for Apple's QuickTime streaming format into its RealServer 8 platform.

RealServer 8, which is in alpha release now and due to ship commercially later this year, will allow the delivery of QuickTime-formatted content to QuickTime players. The two companies did not go so far as to announce that Real is adding support for QuickTime format to its RealPlayer, however.

"We're the number two (streaming media) player, in terms of number of users. Microsoft is number three. It's wonderful that the number one (RealNetworks) and number two are beginning to collaborate," said Apple CEO Steve Jobs, who addressed the attendees of Glaser's opening keynote speech, which he made from Apple's headquarters via Webcast.

Jobs claimed he was "surprised" when Glaser initially approached him about potentially licensing some of Apple's QuickTime intellectual property to run on RealNetworks' servers.

"But after thinking about it, it made sense. We want QuickTime everywhere. The more servers it runs on, the better," Jobs told the audience of the keynote speech.

Glaser's thinly veiled Microsoft monopoly jokes didn't receive anywhere near the appreciation as did news of the Apple-Real alliance. The audience of the keynote speech greeted Glaser's news with loud and lengthy applause.

The other highlight of Glaser's keynote -- which was marred by multiple audio and video broadcasting problems caused by faulty A/V equipment, not by RealNetworks' products or technologies -- was a brief demonstration of a wrist music player.

The Matsushita Electronic/Panasonic device, which looked like a futuristic Dick Tracy watch, was announced Monday by MEI.

Glaser said the new device provides a new form of portable player for downloadable music. It includes a headphone jack and adjustable volume control, among other features.

The new wrist player will be "available very soon" in Japan, said Glaser. He didn't mention US or European availability of the device.

The Real chairman said that MEI also has agreed to an exclusive deal in which RealJukebox product will be bundled with Panasonic consumer music devices in the United States.

Glaser said that over time, just about every consumer device, from home stereos, to telephones, to TVs "have the potential to become a streaming device".

Glaser spent most of his keynote speech demonstrating the RealServer 8 product, which the company unveiled to attendees of the RealNetworks' developer conference in May.

RealServer 8 and the related RealProducer 8 platforms are in alpha and beta test, respectively, and due to go 'gold' in the second half of this year.

He also touted the forthcoming Real Entertainment Center, which consists of RealPlayer, RealJukebox and Real Download products, plus eight integrated services, such as the Real Radio Tuner, Media Guide, Artist Guide, and the like.

RealServer 8 will offer narrowband improvements, but be focused more on advancing broadband capabilities. It will support the MP3 format and will allow for animation to be overlayed over video -- a feature that Real claims will have major appeal to e-commerce vendors.

In a passing reference to the legal controversy surrounding Napster and its music-swapping technology, Glaser told keynote attendees that real, sustainable business models exist for those selling streaming media products and services.

He pointed to Real's 34 million RealJukebox users as proof.

"This is proof you can build legitimate marketplaces based on secure downloads, (samples) from unsigned bands," Glaser told the audience.

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