April 7, 2004 10:08 AM PDT

Glaser: EU ruling a boon to Real's $1 billion suit

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RealNetworks CEO Rob Glaser is praising the European Commission's recent ruling against Microsoft, saying it will also help his company in its private lawsuit against the software giant.

In London on Wednesday to promote European versions of the company's media player software, RealPlayer 10, Glaser said: "The commission did the right thing, the right way, for the right reasons."

The commission ruled on March 24 that Microsoft broke the European Union's competition law by leveraging its near-monopoly in PC operating systems to bully into the markets for workgroup server operating systems and for media players. It imposed a record fine of $613 million and demanded changes in Microsoft software.

In December, Real hit Microsoft with its own lawsuit, saying that Microsoft has been illegally using its Windows monopoly in the media player market. It is seeking in excess of $1 billion.

Though strangely quiet at the time of the EC announcement, when asked Wednesday if it will help Real's action, Glaser said: "My lawyers tell me yes. It's a positive development, the first time any jurisdiction has ruled on media players."

Real has pointed out on more than one occasion that it didn't initiate the commission's investigation--which began five years ago--but did contribute to it.

"It is much better to establish a legal precedent that there was a violation," Glaser said, adding that he thinks consumers and PC vendors will benefit as a result.

Following the EC ruling two weeks ago, 10 U.S. members of Congress wrote to Competition Commissioner Mario Monti calling for him to reconsider the decision and accompanying fine.

One politician to be outspoken about the European course of action is Washington Sen. Maria Cantwell. Both Real and Microsoft are based in the state of Washington, but she was a senior vice president at Real between 1995 and 2000 and still holds several million dollars worth of Real shares.

"She was a member of the lower house before (joining) Real, and her statements have been balanced," Glaser said, referring to Cantwell's earlier term in the U.S. House of Representatives. "She believes in the marketplace and that it's always better to have a marketplace solution--and by the way, we agree with that."

He said that bluster against European regulation should be taken with a grain of salt during a U.S. general election year, with such comments likely to come across to voters as more "pro-U.S." than anything else.

On Tuesday, Real announced a major deal with BT Rich Media for its Helix Universal Server and Helix Service Delivery Suite, used for services aimed at consumers and small businesses that want to create and share content.

It has also announced a deal with Virgin Radio, a broadcast station that's one of the biggest voices in Internet radio, to broadcast using RealAudio 10. This win sits alongside other premium content such as that carried for Channel 4 and European football governing body UEFA, which offers a Champions League package including video highlights.

Real and UEFA won't reveal how many subscribers that service has--past efforts by Yahoo to stream valuable football content at the 2002 World Cup were also shrouded in secrecy--but the software vendor says it has 1.3 million premium subscription users worldwide. Around three-quarters of revenue come from consumer services such as paid-for RealPlayer downloads, and a quarter from licensing deals with user organizations and companies such as BT.

Real is currently in a quiet period, with its first-quarter results due at the end of the month. Over the past six quarters, the company has increased revenue but has yet to report a profit since the tech slump kicked in.

Tony Hallett reported for Silicon.com from London.

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Real Player Bites..
The reason Real PLayer isn't being adopted they way the company wants has nothing to do with MSFT or WMP. It has to do with the fact that the Real Player program is an invasive crappy program that many people don't like.

-Bill
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