Online Media War Gets Real Interesting

RealNetworks dodged a bullet in the battle between two industry giants and now hopes to emerge as a stronger player in digital media.

RealNetworks dodged a bullet in the battle between two industry giants and now hopes to emerge as a stronger player in digital media.

AOL Time Warners endorsement of RealNetworks media technology is part of what scuttled a new licensing deal with Microsoft.

Thus strengthened, RealNetworks wasted no time last week in rolling out a new specification to provide secure content delivery over the Web, which it hopes will be embraced as an open standard.

Backed by a bevy of technology and media giants, including Adobe Systems, AOL Time Warner, Bertelsmann, IBM, InterTrust Technologies, MGM Studios and Sony, RealNetworks announced a specification that calls for a uniform way to deliver and sell copyrighted content securely online. XMCL — short for eXtensible Media Commerce Language — is intended to describe the business rules associated with monetizing digital content, including defining methods for offering rental, pay-per-view and subscription services, said RealNetworks CEO Rob Glaser.

RealNetworks also introduced its own end-to-end system for delivering secure media. The technology is part of the platform that will be used by MusicNet, an online music delivery service backed by America Online, Bertelsmann, EMI Group and RealNetworks and expected to be launched this fall.

Noticeably absent from the XMCL rollout was Microsoft, which spent part of last week introducing new software called Microsoft Producer, which is designed for creating digital media presentations.

The acrimony between Microsoft and RealNetworks is not surprising, given their mutual ambitions to become the leading provider of digital media technology. Its that rivalry, AOL executives claim, that played a major part in disrupting the on-again, off-again licensing negotiations between Microsoft and AOL.

The two companies last week agreed they could not agree on the terms that would see AOLs online service included within Microsofts Windows XP operating system, due to be released Oct. 25.

Other bones of contention included instant messaging, and AOLs threat of legal action against Microsoft for using its operating system monopoly to move into markets that AOL dominates.

News of the talks end came as no surprise to industry watchers. "Were talking about two companies that have no business being together at the bargaining table," said Rob Enderle, a research fellow at Giga Information Group. "Their view of a perfect world is one in which the other one is out of business."