A Risky Try
A Focus on what you do best. This age-old strategy has worked well for RealNetworks, Microsofts main competitor in multimedia software for the Internet. Now, the smaller Seattle-based firm is trying a novel way to contain the software giant. On October 29th, it released the underlying recipe, or source-code, of its RealPlayer software and will soon do the same for its other programs — giving away a big chunk of its intellectual property.
B This may sound like a desperate echo of 1998, when Netscape, struggling in Microsofts chokehold, published the source-code of its web browser(an initiative that yielded few real results until this June, when the first serious new version of the open-source browser, Mozilla, was released). Yet RealNetworks is not playing defense. It is trying to encourage the creation of a common multimedia software infrastructure for every kind of file format and device, thus thwarting Microsofts ambitions in this promising market. The firm hopes that others in the industry(volunteer programmers, media firms and hardware makers)will take the code, called Helix DNA, improve it and make it run on new devices, such as mobile phones and home stereos, turning RealNetworks software into an industry standard. Clever licensing terms are supposed to ensure that this standard does not splinter and that the firm still makes money.
C Individual developers, universities and other non-profit organisations can modify the software as they please and even redistribute it for free, so long as they also publish the source-code for their changes. This is a sort of payment in kind, for RealNetworks is then allowed to use these contributions. Firms, on the other hand, must pay royalty fees if they distribute more than 1 m copies of the code. They also have to make sure that their software works with other Helix DNA products. The softwares development community already has 2, 000 members. And several hardware makers back the effort. But there are risks. Afraid of piracy, media groups are suspicious of anything that might be related to hackers(although they also do not want to depend on, and pay for, technology controlled by Microsoft). The self-created competition could also hurt RealNetworks if customers decide its commercial products, which will be based on the open source-code but with extra features, are not worth paying extra for.
D RealNetworks move is another sign that the software industry is going hybrid. Mixing elements of proprietary software, where the source-code is tightly controlled, with open-source programs enable firms to expand a market, harvest the ideas of others and, they hope, still make money. Even Microsoft is edging this way: it recently announced that partners can now look at — but not modify or reuse — the source-code for Passport, its controversial digital-identity service.
In 1998, Netscape made a dangerous copy.