For the last 10 years, Real Networks has resembled a past-his-prime boxer. Ever since the Internet world said “thanks, but no thanks” to the company’s streaming formats and yes first to Windows Media, then to Flash, the Seattle-based Internet media pioneer has been taking wild swings in hopes of connecting a knockout punch. While the company has periodically landed glancing blows — as with its lawsuit and legal settlement against Microsoft — most of the time, it swings and misses. That has been reflected in its large losses in 2008 and languishing stock price.
Real has recently thrown one last haymaker by opening up a potentially promising — and very risky — line of business. Last fall, the company released RealDVD, a software that allows consumers to copy DVDs. While there are other software solutions for consumers to copy DVDs, the Motion Picture Association of America apparently saw enough of a threat to sue Real, saying the software will enable piracy and theft of content, despite strict limitations put on the number of copies by Real.
What’s promising about a software business that competes with already free, open source solutions and faces pushback from deep-pocketed movie studios? The answer to that question can be found in recent court testimony, in which CEO Rob Glaser unveiled a new consumer box — and hence a larger strategy — that one copyright attorney called “a TiVo for DVDs.” Codenamed Facet, the new box is a proof of concept device that would give consumers the ability to digitally store and then serve their DVD movie titles to any screen in the house.
It’s interesting to note that Glaser says he was inspired by a media server from Kaleidescape. While Kaleidescape’s $10,000-range pricing has made the actual product unattainable for the average consumer, the concept Kaleidescape represents is one with a potentially much more egalitarian appeal. Most of us — even those without Rob Glaser’s net worth — want a place to burn and store digital copies of our electronic entertainment.
Kaleidescape has also been engaged in a landmark legal battle in recent years against the DVD Copy Control Association, which claimed the company was in violation of its Content Scramble System (CSS) copy protection license, since it was creating a system that could copy and store movies on a hard drive. In 2007, Kaleidescape won its case against the group (though the case in currently in appeal), opening the door for Real to pursue its own lower-cost version of the same device.
But beware the belt. Even if it survives a protracted legal battle against Hollywood heavyweights (something which others, such as SonicBlue, have not managed), Real Networks’ success may put it in the ring with younger — and ultimately more fit — contenders.