RealNetworks Inks Deals with Universal, Sony

RealNetworks Inc. announced an alliance today with Universal Music Group, one of the world's "Big Five" recording companies, in a deal expected to accelerate the availability of mainstream music on the Internet.

RealNetworks also inked a deal with Sony Corp. that will allow users of RealJukebox to transfer custom-made digital music selections to Sony's portable audio players, company officials said.

The deal with Universal is the latest sign that major record labels are ready to make their valuable recordings available for sale in digital form over the Internet. The recording industry to date has been extremely wary of the new market, mainly over fears about copyright infringements.

Universal hopes to have its first digital recordings available online by mid-year, once it's satisfied that its electronic distribution system is reliable and secure. The system will use digital rights management technology from Intertrust Technologies Corp. and NatWest Bank's clearinghouse infrastructure.

"This is our first step in building a business around the electronic distribution of music," Larry Kenswil, president of Universal's eLabs group, said at a press conference here at the Consumer Electronics Show, where the partnership was announced.

The deal is significant because the major labels until now have offered only samples of their music online, mainly for promotional purposes, according to Kenswil. In contrast, Universal plans eventually to make the bulk of its albums and singles available for purchase in digital form.

Users will be able to buy Universal's music from various online stores that currently act as distributors for its CDs and tapes, Kenswil said. Universal's vast stable of artists, signed under various labels, includes Counting Crows, Aerosmith, B.B. King, Nine Inch Nails and Tricky.

The deal with RealNetworks is not an exclusive one, and both companies said they expect to strike other partnerships. Still, the alliance is a boon for RealNetworks, which is competing fiercely with Microsoft Corp. in the online music player market.

RealNetworks also said that RealJukebox will now work with Sony's digital music players, including the Memory Stick Walkman and Vaio Music Clip, as well as its ATRAC3 sound compression format and OpenMG copyright protection technology.

RealJukebox lets users compile their own compact discs by editing together songs downloaded from the Web or recorded from other CDs. The deal with Sony means users will be able to play those CDs, as well as songs stored on memory cards, on Sony's portable products, officials said.

RealNetworks also released an upgraded version of RealJukebox that lets users create CDs using technology from Adaptec. The new version also lets users store songs on storage devices from Iomega Corp., including its Zip, Jaz and Clik disks, officials said. The upgrade can be downloaded today at http://www.real.com/.

RealNetworks, based in Seattle, can be reached at +1-206-674-2700 or via the Internet at http://www.real.com/. Universal Music Group is a division of The Seagram Co. Ltd., in New York, and can be found on the Web at http://www.umusic.com/. Sony, in Tokyo, can be reached at +81-3-5448-2200, or on the Web at http://www.sony.co.jp/.

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More about Consumer ElectronicsInterTrustIntertrust TechnologiesIomegaMicrosoftRealNetworksSonyUniversal Music Australia

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