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RealNetworks Goes with the Web

The race to bring digital music to the Web is on -- and it's picking up pace. The latest sign comes Dec. 5, when RealNetworks (RNWK) is due to announce that its Rhapsody music service will be rebranded as and made available to any user with a Web browser. That's a switch from the current setup, which requires users to access music online through a dedicated software application.


RealNetworks, a distant second to Apple in digital music, is eager to make its service available to a wider audience. Apple's most recent count pegs sales of downloaded music north of 600 million tracks, but the company doesn't typically disclose the number of customers. In its most recent quarter, RealNetworks said it had 1.3 million paid subscribers to its music service. Sales in the music division for the quarter ended Sept. 30 amounted to $25 million, more than 30% of sales.

Making Rhapsody available via the Web also means it will be compatible with Apple Computer's Mac OS. That's the latest salvo by RealNetworks in an on-again off-again compatibility war with Apple. Having initially sought an agreement under which songs from the Rhapsody service would be compatible with Apple's ubiquitous iPod music player, Real went ahead and made its songs compatible with the iPod anyway. This naturally drew Apple's ire, which accused the Seattle-based outfit of "hacker tactics." Apple didn't immediately comment on Real's latest move.


While in theory Real's Harmony scheme only adds to the pool of potential iPod buyers -- Apple sold nearly 23 million iPods in the year ended September 24 -- Apple has zealously guarded the iPod-iTunes combination, rarely opening it to third parties, the one notable exception being wireless phone concern Motorola (MOT), which built the iTunes-compatible ROKR phone.
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