RealNetworks, With Narrowed Focus, Seeks to Help Consumers Manage Digital Media Clutter

You might not know it, but you could say RealNetworks is being reborn today. The Seattle-based company (NASDAQ: RNWK) is announcing a new version of RealPlayer SP, its signature software for downloading, sharing, and transferring personal videos to smartphones and other devices. The new features include quick video editing—so you can keep just the parts you want—as well as compatibility with devices like Nexus One and Droid smartphones. The new product also provides easier ways to share video and audio with social sites like Twitter, Facebook, and YouTube.

OK, that doesn’t sound earth-shattering, but it’s the first tangible step in Real’s revamped strategy that president and acting CEO Bob Kimball first outlined last week. Essentially, Real is doubling down on its core offerings—digital media management for consumers, and media software-as-a-service for wireless carriers—while it sheds its less lucrative digital music and gaming businesses.

Indeed, it is a time of sweeping changes at RealNetworks, brought about largely by founder and former chief executive Rob Glaser’s stepping down last month. I recently spoke with Jeff Chasen, a vice president of product development at Real who leads the RealPlayer group, to get more details on the company’s new priorities as well as to hear more of the thinking and context around the latest product.

Chasen is a longtime company veteran who worked on RealJukebox, often hailed as the first commercially viable digital music organizer, back in 1998-99. He says the new RealPlayer product has roots in two trends of the past few years—the rise of portable devices like phones and game consoles, and user-generated video. That led to the release of RealPlayer 11 in 2007, and ultimately to RealPlayer SP, which was rolled out in beta form last June. So far, the company says, RealPlayer SP has been downloaded 70 million times, and has been used to download more than 100 million videos. (The software is free but also available in a premium, paid version.)

Feedback from consumers has helped shape the latest version, which appears to be simpler and easier to use. “We’ve been working on our vision [for you] to access your video wherever you want,” Chasen says. That might mean a clip from YouTube, or something you shoot on your own Flip camera, for example—it is meant to work for any format and on any device. “We listened to what people said in the last six or seven months. We’ve taken a simplicity approach,” he says.

In terms of competition, Chasen freely admits that tech giants like Apple, Google, and Microsoft are all trying to help consumers manage their personal digital media—videos, photos, music. And large photo sites and services like Photobucket, Picasa (run by Google), and every video company out there all have various offerings to help with pieces of the problem. But so far, he says, “nobody’s really resonated” yet—and so a smaller company with deep expertise, like Real, still has an opportunity to own the space.

“We all have digital messes on our laptops. Nobody’s making sense of that,” Chasen says. “We want to try to be the guys you relate to in helping you solve these problems. It’s all part of your content.”

Lastly, I asked Chasen to talk about Real’s current prospects for innovation. “Focus is really important. It’s about simplifying and getting to the stuff that matters to our vision,” he says. “We keep teams small, and we allow innovation to happen. We won’t do as many things as we did before. We are focused on this vision, and on making consumers love our software.”

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