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RealNetworks Lunges for the Living Room

RealNetworks (www.realnetworks.com) has announced two alliances that are designed to move the RealPlayer and streaming media away from the PC and into the modern entertainment-focused living room. Real announced a deal with Sony Computer Entertainment to embed RealPlayer 8 and other RealNetworks client technologies in the PlayStation 2. In addition, Real announced a deal with Nokia to embed the RealPlayer 8 into Nokia's upcoming Media Terminal, a souped-up set-top box.

The two deals are highly symbolic of a trend of living room devices converging in function. Sony (www.sony.com) also announced a deal yesterday with AOL to provide Internet connectivity to the PlayStation 2. Microsoft's soon to be released Xbox game console will also include the ability to hook up to a broadband connection for multi-player games and regular Internet browsing, presumably with some benefit going to MSN.

Nokia's Media Terminal will be released in Europe this fall and early next year in the United States, according to the company. The Media Terminal is being billed as an "infotainment" device, and in a feature that may inspire developers to design for the platform, runs on the Linux OS with an open-source Mozilla browser. The RealPlayer, which will be incorporated into the Media Terminal will be Linux based.

The Media Terminal is described by Sherman Griffin, product manager of consumer appliances at RealNetworks, as a very robust set-top box. The terminal combines digital video broadcast, gaming, streaming and downloadable digital media, full Internet access, and personal video recorder (PVR) technology.

Griffin states that the device will ship with a "very advanced remote control that flips open to a keyboard," so that consumers can access streaming media without having to get off of the couch. Griffin believes that when the devices enabling the viewing of streaming media on the television hit the market, there will be a surge in sites designed and formatted specifically to be viewed in that manner.

"One of the key applications that consumers still want is entertainment," adds Griffin.

The terminal is designed with network interfaces for satellite, cable modems, ADSL, as well as dial up. Griffin expects that the device will sell retail at major electronics stores, as well as be distributed through certain alliances with leading ISPs and broadband providers.

RealNetworks has previously worked with Nokia to offer a wireless player for the Nokia 9210 Communicator as part of its move to free the RealPlayer from the PC.

After the announcement, RealNetworks' stock was up 39%, currently trading at $12.19.

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