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Does Real Networks qualify for Gorilla Status? The book specifies it has the potential to be one on page 72, but says it is still in the chasm. That was a year ago, have things chenged?

I can't profess to be an expert here because I am not a programmer, my concern is usually more along the lines of hardware and telecom. But I personally believe they have a solid hold in the field of streaming media on the Internet.

Their share of the market is 80% to 90% of all streaming media, as I recall (I probably don't have all the facts and figures at my fingertips). As far as I know, their system is proprietary to the extent that they have a product where once a website decides that Real is their streaming choice they have to commit to its products or at some point completely change formats -- no other company can send or receive Real's file format.

One unclear area is cost barrier to entry by the competition. We know MicroSoft has a competing product, right? but they aren't getting anywhere with it. That is good for Real, the longer they can have the "industry standard" system the greater their gorilla status becomes. It's like DOS in the early days, it competed against CPM, Apple, Unix, etc. But now it is inconceivable to think of a company throwing away their Windows machines and buying MACs.

I also see Real entering the bowling alley. Such recent reports as the one that notes that the average banner click-thru is less than 1% but if you add audio it increases to 5% are so significant to Real it is astounding. We're talking a significant competitive edge to the leading website's bottom line -- this isn't about cool technology anymore, it's about money.

More industry awareness, such as a keynote address at the last Interop+Networld convention also helps. And other media awareness such as the replay of the recent Internet birth. Such talk helps a lot, and as soon as the Real name become as common as Netscape it will start to tornado.

But the N word (Netscape) may take me back a little, there are similarities in the business model -- give away the browser but charge for the server software. One difference though, a browser is generic, if a customer doesn't like his browser he can get a different one and still see all the net. Not so with multi-media files, you have to have the correct format, and to date that is the Real format. So there is a proprietary aspect to it.

The tornado will start when it becomes unfashionable to have a website without multimedia. This will probably happen soon, especially since G2 provides better technology for 28.8 modems. But the real growth will happen in 1999 when we start to see greater bandwidth in the home because of cable modems and DSL.
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