“We are downgrading RealNetworks from Buy to Neutral. Microsoft announced yesterday it plans to launch a music service jointly with Viacom called URGE. URGE will be bundled with the next version of the Windows media player (featured as prominently as RealNetwork’s, Napster’s and other services), will enable users to download individual tracks, and subscribe to a monthly offering–very much like the one provided by RealNetworks,” A. Sasa Zorovic writes for Oppenheimer & Co. Inc.
“MTV indicated to us [that] the underlying technology for the upcoming service is being built by Microsoft. We believe this indicated Microsoft continues to be very interested in providing a service ultimately competitive with Rhapsody and is likely to learn ‘best practices’ from Rhapsody of its partnership on MSN,” Zorovic writes. “We believe this partnership is likely to increase the risk profile of investing in RealNetworks. Though the company benefited from the capital infusion from Microsoft, the partnership benefits seem much more limited after this announcement.”
Full report (.pdf) here.
As we stated when Microsoft and MTV announced URGE: “iPod is the key and MTV and Microsoft don’t have it, no matter how much marketing they put behind URGE. Too little, too late, Microsoft. For the health of Real’s Rob Glaser, however, hopefully the defib was charged up and nearby when he heard about this. It sounds like Real’s new partner Microsoft wants to finish them off once and for all.”
RealNetworks’ CEO …buffering… Rob Glaser …buffering… “PlayedForSure.”
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Related MacDailyNews articles:
Microsoft, MTV target Apple’s iTunes Music Store leftovers – December 15, 2005
Microsoft-MTV ‘URGE’ may interest antitrust regulators; Anti-iTunes labels Sony, Warner back ‘URGE’ – December 14, 2005
MTV-Microsoft URGE music service not targeting iPod, iTunes users; Real CEO PlayedForSure? – December 13, 2005
MTV and Microsoft team up for new digital music service ‘URGE’ – December 13, 2005
Microsoft developing Microsoft-branded competitor to Apple iPod? – December 08, 2005
Motley Fool Take: MTV, Wal-Mart will leverage brands to beat Apple iTunes Music Store – May 10, 2004
MTV jumps into Apple iTunes-dominated online music service fray – May 07, 2004
Digital music panel: Apple could become the MTV of the record industry – March 31, 2004
Time to get real and close shop, hand back the money to investors and creditors, sell the IP, and call it a day.
and a lesson to MTV, et al. – Microsoft won’t hesitate to stick the knife in your back either.
HaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHa..
(drying tears)
WTF did Glaser expect? Guys like Ballmer and Gates to make nice nice after you SUE them?????
Rob- at least you got a few mill. Hope you did’nt spend it all.
I guess Rob “Donut Boy” Glaser should pick his “friends” more carefully. This is a major reaming of Rob from Bill, Monkey Boy, et al without lubricants to boot.
Rock on SJ!
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Glaser, mouth packed full of Krispy Kreme, “Wha? Wha happen?!”
Glaser sure is one FDF.
Well if you jump into bed with the Devil what do you expect eh. Said it at the time but didn’t expect it to be proved so soon, that all that agreement did was to ensure a slower, nastier but certain death. Isn’t it strange how, just like the priest in War of the Worlds, and depite endless prior examples provided as a clear warning these ‘players’ still go to the Mobs head honcho seeking assistance and survival. I reckon you had a better chance going to Adolf Hitler in 1939 asking for assurances of non agression.
THEY JUST NEVER LEARN
Amazing. Some people just don’t learn from history. This is SOP for Microsoft: form a “partnership”, bleed the partner for information, find reason to dissolve partnership, release competing product.
I thought the lesson had been learned good and hard by everyone in the software industry by now: Don’t partner with Microsoft. Guess Real didn’t get the memo.
“Well if you jump into bed with the Devil what do you expect eh.”
Especially when you figure that Rob Glaser used to work for Microsoft.
How will this affect Krispy Kreme stock, i wonder?
What you all don’t realize is…
M$ has the power of bundling whatever they want with every new PC.
When a new college kid gets a computer what list of music stores are they going to see?
URGE
Napster
Real
What are they not going to see?
iTunes
That’s right, these other services get first exposure to all the newbies and morons, who once they start buying WMP protected media combined with the new “DRMed to hell and back” Intel processors, they won’t have any choice BUT buy a PlayforSure branded product. Which of course each service will make their own deals with certain player manufactorers for a commission on each product sold.
DELL Junkbox
Creative copycat Zen
M$ Music Player (it’s coming trust me)
Napster crapster player
Real knows this and thats why they sued M$ to get on this list, it gives them a fighting chance.
Now you might say, “But the iPod!!”
And I say “But your right, for everyone who bought Fairplay DRMed music they most likely will stay with a iPod when they upgrade, unless iPods get worn out or something.”
So Apple actually got the first crack at the whole market, and unlike a PC, iPods really don’t need to be upgraded as often because their chief purpose is to play music, and a 1st generation 20GB will still run fine as long as it’s taken care of. Maybe that’s why the rumors of Apple phasing out Firewire 400 might have some truth.
Anyway I still like my 3rd generation iPod the best, it has no buttons to wear out, except the lock switch. So it’s not a problem getting dirty.
My new iPod video is a bit of a cranky fsck, there is just too much going on with it, photo’s, video, tv shows, music videos etc as welll as the music.
The battery life of two hours for video is depressing, but with a charger I guess it’s good for the road. Although it takes hours to process video for it.
But it sure beats staring at the back of some guys greasy head at 30,000 feet.
Didn’t I mention that bill gates experimented in animal sex?
HHAHAHAHAHAHAHHAHHAHA
Glaser “Hey guys, I want to announce this deal we just did with Micro—“
Assistant”Hold on boss.. you did a deal with MICROSOFT?! The stock is tanking!”
Glaser “That doesn’t make sense.. what the hell is URGE?”
Assistant “Ever seen Pirates of Silicon Valley?”
Glaser “Uh.. no.. never got around to it…”
Assistant “You really should get on that. Microsoft fucked us”
Before URGE is even released, it’s playing a funeral DIRGE.
The Gatesfather: Oh c’mon, get real!
Unknown Employee: [Unintelligible].
Ballmsy I’m-Alone: No, no … he means GET REAL!
Unknown employee: [Unintelligible].
Ballmsy I’m-Alone: I don’t care how the xxxx you do it, just get it xxxxing done or I’ll cut your xxxxx off. N-O-W!
Unknown Employee: We’re… [unintelligible] … with Urge.
TheGatesfather: Fine. Now how’s development of the MDN trojan going?
Unknown Employee: [Unintelligible] … popup.