The Real Deal
By Carlo Longino, Wed May 14 11:30:00 GMT 2003

RealNetworks makes a push into mobile streaming media. But will it succeed?

RealNetworks made some headlines a few weeks back when it announced its RealOne Mobile Media Guide, a service it hopes will emulate the success of its wired-Net RealOne Superpass subscription-based streaming content service.

Superpass has been something of a Web success story; Real announced with their latest quarterly earnings that the service had attracted a million subscribers. At USD 10 a month, that's a healthy chunk of change. Superpass offers users access to all types of audio and video content, many of them exclusive to the service. They've got sports commentary, news shows, movie trailers, 3200 radio stations worldwide, concerts, and so on. Real is also looking to bulk up the service with its buyout of, the company behind the Rhapsody online music service.

RealNetworks is up against heavyweights Yahoo! and Microsoft in the Web streaming space, but it's the first to make a serious foray into the mobile arena. But at this early stage, the Mobile Media Guides are little more than a land grab, free (sort of) services with little compelling content and frankly, not a lot to tempt consumers to spend.

Counting the Costs

What's on offer? Audio-only newscasts from the US' National Public Radio and CNET Radio, a four-day-old- video sports news update, PGA golf highlights, a 90-second clip from a low-rated TV sports show, movie trailers and short films, and a music section featuring videos from a couple of labels and a dozen full-CD streams. All these streams played fine over a GPRS connection, though the audio quality was about what you'd expect from a phone speaker and the video was pretty abysmal - about the best you could hope for from a 21k stream.

At least Real isn't making people pay for this. But that doesn't mean that GPRS users can access this stuff for free, they've still got to answer to their carriers' data charges, something that could add up quite quickly. For instance, I pay AT&T Wireless USD 8 per month for 1 MB of GPRS data, and then 1 cent for each kilobyte over that. Using any of these service would chew through that allowance and cost me out of pocket nearly instantly.

When I tried the service on my 3650, I used the counter on the phone to get an idea of what some of these streams would cost me. I listened to a minute of the NPR newscast, and it came in at about 120k. So the whole 5 minutes would use half my monthly allowance, or alternatively, cost me 6 bucks. I watched the trailer for Charlie's Angels: Full Throttle, and the two minutes of tiny, low-quality video was about 350k. So again, a third of my allotment, or USD 3.50. Most egregious was the music section. One minute of a Rolling Stones video was 232k, so the whole 4 minutes would pretty much use up my meg, or alternatively, cost me 10 bucks - nearly the price of buying their latest CD. To listen to an entire 40-minute Willie Nelson album? Roughly 8 megabytes, or a whopping 80 dollars at 1 cent per kilobyte.

Let's look at that again. A newscast I can get for free either on the radio or the Web could cost me 6 bucks. To watch a trailer of dubious quality for a movie I could see for USD 5 at a matinee: USD 3.50. And 80 bucks for a CD I can buy online for as little as USD 10?

Stream to Nowhere

It's no wonder that RealNetworks hopes to take a cut of the revenues this traffic generates for carriers. But at these prices, will there be any traffic? For this service to stand any chance of success, Real has to implement some sort of subscription model so users won't have to worry about costs and constraints of bandwidth. It's not easy for users to figure out what these streams will cost them, or how much of their monthly allowance they'll use up, and if they knew upfront, it's likely they wouldn't bother downloading them.

But to implement this type of model would require Real to partner with carriers, and to do this, they've got to convince them that the service offers some value to users, which at this point, it really doesn't. While Real may have a pretty good handle on Web media, they really don't show any understanding of the mobile space.

There's nothing on the service users can't find elsewhere for free, and little that builds on mobility, meaning there's nothing that would make somebody want to use the service rather than wait until they're in front of a PC, TV, or radio. The only thing in the service that might be useful when out and about are movie trailers - though poor-quality trailers the size of a large postage stamp aren't much good, even less so when none of the 5 movies featured have actually been released to theaters yet.

It doesn't appear that much thought was put into this service. I'd like to meet the person who thought that people would actually pay to see a inch-inch wide, choppy stream of golf highlights, or that people would be into giving their carrier 80 bucks to hear a low-quality stream of an entire CD on their phone.

It's hard to imagine US carriers supporting this service. They've tread very carefully in introducing data services to the mass market, and have been fairly protective in what they've offered through their portals. They're unlikely to support a service that would allow users to run up such huge data charges so quickly and so effortlessly, and unlikely to support a subscription model with Real at the top - there's not a lot of incentive for them to sign on to receive a percentage of user fees when they have to take the burden of delivering the data and supporting the end user.

It's also hard to envision a market for these guides as a free or pay service as well. Any user savvy enough to find the service and play the streams would quickly realize they're not worth the cost, whether that cost be in data charges or subscription fees. Young people that pay their own bills would much rather spend their money to talk to their friends or get ringtones, and it's doubtful those whose parents pay the bills would be too happy to see the data charges these streams could quickly rack up.

Based on this first effort, Real's future in mobile streaming looks about as blurry as one of their movie trailers. They've got a lot to do to convince both carriers and users that mobile streaming media is worth the effort - or the cost.

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Carlo Longino is a freelance writer based in Austin, Texas. His previous experience includes work for The Wall Street Journal, Dow Jones Newswires, and Hoover's Online.