RealNetworks gets boost from "Big Brother 2"

RealNetworks said Thursday that more than 25,000 people have paid to watch the Webcast of CBS' reality TV show "Big Brother 2" via a subscription made available through RealNetworks and CBS. "Big Brother 2" features 12 strangers who live together as they compete for $500,000 by avoiding getting booted from a heavily bugged house. Fans can watch an entire broadcast run of the show at the official CBS Big Brother Web site for a one-time fee of $19.95, or they can subscribe to RealNetworks' RealPlayer GoldPass for $9.95 per month, which includes exclusive programming, games, software downloads and other content. The company claims 300,000 subscribers for its GoldPass service to date.

While the number of subscribers is the latest sign that people are willing to pay for streamed content, it also underscores how RealNetworks' business is beginning to rely on content for revenue. The Seattle-based company has been facing hard times, slashing its staff by 15 percent last week and falling short of analysts' estimates in its latest earnings report. RealNetworks earned $2.4 million, or 1 cent a share, on sales of $47.9 million, marking a 24 percent decline from the year-ago quarter. In addition, consumer sales dropped to $15 million from $18.6 million last quarter, while advertising sales fell from $5.5 million to $4.6 million.

RealNetworks also has been facing heated competition from Microsoft as both companies race to dominate the market for streaming video and audio. According to Nielsen/NetRatings, however, RealNetworks has the widest audience for the RealPlayer format. Microsoft's Windows Media comes in second, and QuickTime falls in third.

While RealNetworks said subscription figures for the show's Webcast validates its subscription business online, Neilsen's Mak said that subscription fees are still something people need to get accustomed to because people are used to the Internet being free. --Gwendolyn Mariano, Special to ZDNet News