For those who missed the news, the new version of Real Player downloads videos from YouTube and just about any site with Flash video. It’s a potentially handy feature for some users but a total nuisance for the emerging Web video industry and a disruptive move by a desperate Real networks.
Check The Scobel Show for a demo.
Unfortunately it creates a total nightmare for the industry as the content holders scramble to lock down the content they’ve licensed to all the Flash video distributors while no user has a Flash client that supports encryption. Whoops. Bleh. “Please download this new version of Flash to view this video on YouTube” isn’t going to fly. It’ll be interesting to watch this play out.
The natural question is, why would Real disrupt this fragile and emerging ecosystem for a marginal feature? My opinion: desperation over a dwindling premium software line. I’m guessing those $30 upgrades to Real Player make up a significant amount of their revenue, and likely a disproportionate amount of their margin (compared to Rhapsody where the content costs are very high and eat a lot of margin). I’m also guessing that the sales of the Real Player aren’t growing at the rate they used to and could use a shot in the arm. If you’re going to charge people $30 for software you’d better keep adding features, and in a YouTube world where you barely need a desktop media player adding functionality to YouTube is a decent hail mary pass. Voila, a questionable feature that will unquestionably drive Real Player downloads and therefore sales. Smart move on that front, ballsy move considering they’re dealing with many of the labels and studios in other parts of their business. Curious to see how they react.
Rafat posed some good questions to Rob Glaser tonight on PaidContent.org, which is what got me thinking about all this again.
ian