Jul. 22, 2002/Vol. 160 No. 4
Is PC-TV the Real Deal?
RealNetworks' streaming media goes live in a European market that's dead for on-demand video
BY JENNIFER L. SCHENKER/LONDON

AP/COURTESY OF CNN
OLD AND NEWS: Subscribers to RealOne Super-pass can choose between the major networks'? breaking news and some of their archived classics, such as The Old Grey Whistle Test

Dotcoms offering film and music on personal computers - so-called streaming media - have gone bust, and TV broadcasters pushing video-on-demand (VOD) won't recoup returns on their investments any time soon. But a multimedia service launched in Europe last month is hoping to show that the convergence of TV and the Web can counter this unhappy trend.

Lots of different media players - software summoned by conventional Web browsers - enable you to play sound or video clips embedded in Web pages on the PC. But RealNetworks' RealOne SuperPass for Europe goes beyond other services. It is a one-stop shop for video and audio links to news, sports, reality shows and music clips from a variety of content providers, including the BBC, CNN, MTV and Britain's Channel 4.

In one window on your computer monitor RealOne can deliver exclusive streaming audio and video, such as archived clips of Elton John, the Police and U2, from the bbc's The Old Grey Whistle Test, a TV rock show from the '70s and '80s. An adjoining window displays text information about the video. Another window allows users to surf the Web - or even work - as the video plays, while a fourth features a personalized list of things to play or listen to. The idea is to marry the best of TV with the Web. And charge for it.

RealNetworks, a Seattle-based streaming media software company, is among the first to aggregate content from different media sources and apply the pay-TV model to broadband Internet, according to Jupiter Media Metrix, a consultancy specializing in Internet analysis and measurement. Though most Internet content is likely to remain free, providers of premium audio and video say they'll put their programming on the Net only when they see the money. "People are prepared to pay for multichannel TV, now we have to change their expectations for what they see over broadband Internet," says Jonathan Crane, director of commercial broadband services for BBC Worldwide. "And RealOne is certainly helping to do that."

RealNetworks' RealOne service already has some 600,000 U.S. customers, who pay $9.95 a month for exclusive streaming audio and video from the likes of ABC News, CNN, Fox Sports and NASCAR. The European version of RealOne, which costs ?14.99 a month, includes mtv.co.uk's archives and over 1,000 music videos from the U.K's VidZone. It also offers links to Channel 4's Big Brother, including exclusive access to two live round-the-clock video feeds and a continuous audio feed. Another service revolves around the BBC's Top Gear TV program for car enthusiasts, with a VOD database of 140 test drives and reviews.

For sports fans, RealOne SuperPass has live audio coverage, combined with interactive match tracker applications of more than 60 UEFA Champions League matches, on-demand highlights of each day at Wimbledon, plus a channel devoted to cricket with audio match reports, interactive statistics and live scorecards. On the news front, RealOne provides hourly reports from BBC News in the U.K. and BBC World on the Continent. Also available to RealOne Superpass subscribers: all of the video on cnn.com Europe. Local language services will be added later.

The key to making broadband a mass market service is to offer high-quality video, says BBC Worldwide's Crane. "The porn people do that already," he says. "Unless the world is to drown in broadband porn it needs the likes of the BBC." The quality of RealOne SuperPass, accessible to narrowband users too, is already good enough to encourage TV broadcasters to start streaming their content and archived material in return for revenues, he says.

Broadcasters like the BBC have entered revenue-sharing arrangements with RealNetworks. But given the European experience with on-demand TV programming, the profit outlook isn't promising. In a June 20 report, independent market analyst Datamonitor predicted that providers of video-on-demand over TV in Europe will not break even before 2006; in fact, costs will outpace revenues over that period by ?2.5 billion. Clearly RealNetworks is hoping that providing streaming audio and video to the PC will be a much better business.