RealNetworks to Be Default Player

Wednesday, December 12th 2001, 12:00 am
By: News On 6

SEATTLE (AP) _ RealNetworks' music and video player will become the default player on Compaq's consumer computer line, replacing Microsoft Corp.'s Windows Media Player, the companies said Tuesday.

The deal, scheduled to be publicly announced Wednesday, also will seek to draw Compaq users to Real's paid subscription services for music and video content. Called RealOne Membership and RealOne music, the services give users access to sports, music and other content, for a monthly fee.

While Real is already the default player on computers made by Gateway and Dell, those deals simply provided users with Real's free software for playing music and video on their computers, Real Chief Executive Larry Jacobson said. The company hopes this deal will prove more lucrative, as it draws users to its paid services.

``We've taken the next step,'' Jacobson said. ``This is not just about software. It's about letting people know that there's content out there.''

To entice users, the two companies will have a broad marketing plan that includes a welcome video running on the RealNetworks software and a special entertainment key that sends users to Real's content site, Jacobson said in an interview.

Neither company released specific financial terms, although Jacobson said the two companies would share revenue from content subscriptions. The multiyear deal is nonexclusive, and Jacobson said Real was exploring similar deals with other computer makers.

Compaq's Presario line of computers is scheduled to ship with RealNetworks' player as the default player, beginning in mid-March. Compaq's business computer line will not be included in the deal.

Compaq spokeswoman Tiffany Smith said she didn't think the deal would negatively affect the Houston company's relationship with Microsoft. The software giant, which makes the Windows operating system found on most Compaq computers, is in a fierce battle with Real to dominate the computer music and video player market.

``Microsoft completely supports Compaq's strategy to offer choice for our customers,'' Smith said.

Compaq was drawn to the deal because of Real's subscription content service, she said, although the company is not expected to gain significant revenue from the deal.

``It's not going to be the moneymaker of the PC,'' Smith said.

Compaq and Hewlett-Packard Co. are continuing to explore a proposed $24 billion merger, despite opposition from members of the Hewlett and Packard families, which control 18 percent of HP stock.