As part of the deal, Listen has agreed to use the RealAudio codec as its default format, rather than the Microsoft Corp technology it previously used. A spokesperson for Listen said the company will be re-encoding its entire library in RealAudio, but it will offer Windows Media Audio if its distribution partners demand it.
RealNetworks’ strategy to achieve dominance of the internet media space involves ensuring ubiquity of its playback and streaming server software, as well as its codecs. It has made much of its source code available for free or commercial use, but is fiercely protective of its codecs.
By investing in Listen, which offers Rhapsody, a rival of MusicNet, which is 40%-owned by RealNetworks, the company is showing that it can imitate Microsoft’s tactics of flexing its financial muscle to ensure wide adoption of its protocols.
Listen, which has recently been struggling and laying off staff, said it will use the cash to expand its services beyond the PC. The two companies will also potentially work on more joint services in future, though there are no firm plans at the moment.
Source: Computerwire
