Real Looking for Alliance with Apple

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Tim O'Reilly
Apr. 15, 2004 11:15 AM
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The NY Times has a story out today about Rob Glaser of Real appealing to Apple to cooperate in the music space. According to the Times:

"In his message, which was obtained by The New York Times from a person close to Apple, Mr. Glaser asked Mr. Jobs to consider licensing Apple's Fairplay digital rights management system to RealNetworks to permit customers of the RealNetworks music service to play their digital music collections on iPod players.
In exchange, RealNetworks would make the iPod its primary device for the RealNetworks store and for the RealPlayer software.
The message notes that both RealNetworks and Apple support the same digital music technology standard, known as AAC. But because it is not possible for RealNetworks' encrypted music services, Rhapsody and the Real music store, to be played on iPod, RealNetworks is considering switching to Microsoft's competing WMA format, which would make the RealNetworks services work seamlessly with Microsoft's technology.
"We are seeing very interesting opportunities to switch to WMA," Mr. Glaser wrote. "Instinctively I don't want to do it because I think it leads to all kinds of complexities in terms of giving Microsoft too much long-term market momentum."
Apple executives would not comment on the message. But it seems likely Mr. Jobs will rebuff the offer."

It's too bad if Apple does this. They've pioneered other markets, rebuffing cooperation in the interests of going it alone, only to have their early leadership taken away from them. A broad-based platform strategy beats an application strategy every time, at least as long as I've been around the computer industry. It's how Microsoft beat Lotus, Novell, and Netscape. Apple has a unique opportunity to take its early market leadership and build out the next generation of music services.

I'm sure that there are a lot of complex factors in this decision that I'm not aware of, but I hope that Apple steps back to take the long view. I hope that other Mac users agree, and let Apple know in any way that they can.

Tim O'Reilly is the founder and CEO of O'Reilly Media, Inc., thought by many to be the best computer book publisher in the world. In addition to Foo Camps ("Friends of O'Reilly" Camps, which gave rise to the "un-conference" movement), O'Reilly Media also hosts conferences on technology topics, including the Web 2.0 Summit, the Web 2.0 Expo, the O'Reilly Open Source Convention, the Gov 2.0 Summit, and the Gov 2.0 Expo. Tim's blog, the O'Reilly Radar, "watches the alpha geeks" to determine emerging technology trends, and serves as a platform for advocacy about issues of importance to the technical community. Tim's long-term vision for his company is to change the world by spreading the knowledge of innovators. In addition to O'Reilly Media, Tim is a founder of Safari Books Online, a pioneering subscription service for accessing books online, and O'Reilly AlphaTech Ventures, an early-stage venture firm.

What do you think? Should Apple work with Real to make AAC and Fairplay the standard? Or should they let Real go with WMA, and fight the rest of the industry on their own?
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Showing messages 1 through 4 of 4.

Keep your cool
2004-04-20 03:09:03 lpruszynski [Reply | View]

I hope that Steve does take a long view on this. If Apple doesn't embrace and extend the Redmond crap will.
That's how Apple shot itself in the foot the 80s by not licensing its OS. I can see a similar situation happening if Steve plays supreme, no time for arrogance here I'm afraid.

Stay Quiet When You Deal with Apple
2004-04-16 08:04:46 Derrick Story | [Reply | View]

I'm not sure how the story got out that Rob Glaser wanted to team up with Apple's music service, but I hope that Real didn't publicize the offer to put pressure on Steve Jobs. That would be a mistake. For the sake of Real, I'm hoping that the story was an unfortunate leak.

Any company that wants to do business with Apple needs to understand how Apple does business. A deal of the magnitude of the Real joint venture would need to be handled delicately, establishing a relationship of trust first, then moving to the details.

Look at the way Steve Jobs worked with the Big 5 to cut the music deal in the first place. Look how Apple has done its best to live up to the DRM standards they promised (much to my disgust at times).

If you want to deal with Apple, you have to spend some time learning how to work with them. And you're not going to bully them in public. It's the only company I know that will sit at the poker table with a pair of twos and raise the bet.

Loss leader
2004-04-15 20:44:53 mikego [Reply | View]

As Jobs said, the iTunes Music Store is Apple's loss leader to fuel sales of more iPods. With more music outlets available from different sources, that could conceivably also spur even more iPod sales. By relinquishing being the only online music sales outlet for the iPod, Apple stands at the threshold of possibly making the iPod and AAC the de facto standard.

Apple should cut a deal
2004-04-15 12:39:28 pylgryme [Reply | View]

Yes, Apple should cut a deal with Real. Since the company does not make a competing music player I can see no harm, except that it might wound Steve Jobs' pride to partner up with a man who has been a constant critic. I'm sure Steve Jobs would prefer it if Glaser and RealNetworks just withered on the vine, but let's hope Jobs takes the long view and does what is best for the company.

Showing messages 1 through 4 of 4.

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