RIDING high, RealNetworks debuts copyright protection plan

<br>SEATTLE (AP) _ RealNetworks has developed technology that would allow Internet retailers to track the sale and use of songs or movies on the Web and make sure the goods aren't distributed illegally.

Wednesday, June 20th 2001, 12:00 am

By: News On 6

SEATTLE (AP) _ RealNetworks has developed technology that would allow Internet retailers to track the sale and use of songs or movies on the Web and make sure the goods aren't distributed illegally.

The product, to be unveiled Wednesday, is aimed at companies that want to capitalize on Napster's popularity, while making money and not violating copyright.

If a person rents a movie over the Internet, for example, the system would ensure it is transmitted securely to that person's computer, keep track of how many times or for how long it is watched, and make sure it isn't copied or shared.

Eventually, RealNetworks hopes the technology will be go beyond computers to television and virtually any other type of digital media.

``The potential for these initiatives are just so enormous,'' said RealNetworks President and chief operating officer Larry Jacobson.

RealNetworks said Sony Pictures Digital Entertainment, the arm of Sony that distributes movies over the Web, would be among the first customers for RealSystem Media Commerce Suite. It also will be key to Real's own plans for subscription media services, including MusicNet, a partnership with AOL Time Warner, Bertelsmann and EMI Group that seeks to distribute music over the Internet for a fee.

RealNetworks hopes to have an edge over competitors because its system builds on its existing products. That includes its popular RealPlayer, the dominant Internet digital media player that RealNetworks gives away, and its software that it sells to companies to deliver audio and video over the Web.

RealNetworks on Wednesday also is launching an effort to establish an industry standard for technology to distribute music and video over the Web. So far, RealNetworks has just a few supporters, including IBM, Sun Microsystems, EMI and Napster.

Seattle-based RealNetworks has been buoyed by its inclusion in AOL's Internet access software, used by 30 million AOL customers.

Recent negotiations over whether Microsoft's Windows Media Player would also be part of AOL's software _ a sticking point in larger discussions over whether AOL would be included in Microsoft's new operating system, Windows XP _ faltered Saturday after they could not agree on terms.

AOL Time Warner vice president John Buckley said was willing to include Windows Media Player in the AOL system, but was not willing to make it work better than RealNetworks' technology.

Microsoft contends the talks broke down over a number of issues, and bristles at the suggestion that it requested preference over the RealPlayer.

``We do not need AOL to distribute the media player,'' Microsoft spokesman Jim Cullinan said. ``We simply talked about supplying our mutual customers with a choice of format.''

Analysts say RealNetworks is the true winner of the spat.

``Anytime you see AOL backing away from Microsoft technology, RealNetworks is automatically going to benefit,'' said Phil Benyola, a digital media research associate with Raymond James & Associates. ``It seems like AOL is willing to sacrifice something to keep Real as most-favored nation, so that's a good endorsement of Real's technology.''

Of course, AOL Time Warner also has a vested interest in RealPlayer remaining dominant _ the media giant owns a 20 percent stake in MusicNet, which will run on RealNetwork's technology.

AOL spokeswoman Kathy McKiernan would not comment directly on whether AOL's relationship with RealNetworks or MusicNet played a role in the Microsoft negotiations, but said that AOL thinks competition among media players is important.