SME 2018: RealNetworks Founder Rob Glaser Talks RMHD and Real's Longterm Strategy
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Read the complete transcript of this interview:
Jan Ozer: Jan Ozer here at Streaming Media East. I'm with one of the true legends of streaming media, Rob Glaser from RealNetworks, back again. I first met Rob in 1993 when we were both teenagers. I met him at a COMDEX show in Chicago and he went on to found RealNetworks which was the pioneer, the first company that really made a noise, first with audio and then with video in the streaming space. Then it kind of went away for a while and now you're back with a new compression technology that's doing very, very well in China and you're ready to bring that to the states. Now why don't you tell us about the new codec and why it's doing well in China and why it's going to succeed here.
Rob Glaser: Well, it's great to talk to you again Jan. It's been over many years, it's been a delight and you're certainly one of the most knowledgeable people I know in the business about streaming media and video technology specifically. So, we've been in the video technology business for a long time, but we actually got out of it as my colleague, Reza Rassool, our CTO, told you at NAB. We sold our video technology to Intel in 2010, but at the same time, we still have a lot of passion for it and a lot of deep expertise in the company. So I came back to run Real again about four or five years ago, I was first acting and then became a permanent CEO again, and I saw a great opportunity starting in China for us to create a next-generation video technology. So, we built a team in a combination of Seattle and Beijing to create a next-generation of codec technology, which we call RealMedia High Definition (RMHD), and we've now started launching it in China and we're having great results.
Jan Ozer: So how do you do that? There's so much IP, there's years and years of development and H.264 and tons of other codecs, how do you do that without stepping on anybody's IP?
Rob Glaser: Well, there's a few aspects to that which is how do you get market traction and how do you handle from a patent standpoint? From a patent standpoint, I let the lawyers speak to that, but we do a lot of really innovative things. We file our own patents, we have our own IP and I feel very good about our IP position, but IP is a complex issue so let's sort of leave that as we've got great patents and I feel very good about our position of our technology that we've built basically from scratch. On the other side, the market side of it, the reality is that in China we've always had market momentum, so whereas in the US and Europe a lot of things, some of the competitive then which was Microsoft were the primary ones that were different, a few other marketplace things caused our video technology not to have prominence in the market, in China, we never lost prominence.
We've had a vibrant licensing business for our current generation of video technology, now our previous generation which is called RMVB or RealMedia Variable Bit-Rate, and it's still very popular in China on VideoCDs, on streaming sites, on download sites, it's very popular. So about three and a half, four years ago when we commissioned the team to create what became RealMedia HD, we had market position we could leverage. Going into a market you already have a position you're encouraging people to go to the next generation of your technology is very different than going into a market where you're starting from scratch.
Jan Ozer: I had a conversation with a codec vendor this morning and they hadn't read Crossing the Chasm, which I know you're familiar with and anybody who grew up marketing in the 90s is. The chasm is just so tough from a codec perspective because you could have the best technology in the world, but unless it's easy to implement none of the people who can use it in a way that can help you are going to do that. So how do you cross the chasm with a new codec?
Rob Glaser: Well, that's exactly why we started in China. So, what's happened in the world is when you think about the most valuable technology companies in the world it's a phenomenal thing. Five of them, five of the US-based companies, Facebook, Google, Apple, Microsoft, and Amazon. Those are companies that are worth 400+ billion dollars each. There are two other companies, Tencent and Alibaba, that are also in that market category in China so that's an example of how China has become a completely parallel ecosystem. It's the biggest country in the world by population, the second biggest economy in the world and unlike any other tech market in the world, it really is its own world. So, the social networking platform, WeChat, totally different from the social networking platforms here. Devices, there's vendors like Xiaomi that have no position in the US that are huge in China and many other Chinese manufactures like Qiaowei that have minor positions internationally are huge in China, so it's a totally parallel world.
When we chose to enter that market, we created a network of partners that were specific to China so we had the ability to get traction with partners like CIBN, they're like the CBS or one of the major broadcasters in China and they did a bake-off between us and other technologies. They decided we had the best technology and they have the power to help us drive infrastructure equipment so we're putting our codec on their set-top boxes and in their market, they have a lot of influence over what set-top box it is, they've started deploying it on their mobile devices so their mobile affiliate which is called Stars China uses RealMedia HDR and HD as their HD platform for their mobile devices.
Jan Ozer: How is that going to translate to the US?
Rob Glaser: Well, that's just it. Once you get an ecosystem where there's end-to-end solutions including chip-set implementations, including end-to-end hardware, it's much easier to go to adjacent markets and say, "Hey, we have an end-to-end solution. We've solved the chicken and egg problem." So, today, sitting here talking to you May of 2018, we're not quite there yet for a broad rollout in the US market, but we're sort of waving the flag and saying, "Hey, we're open for business." For people who want an innovative technology, for people who are interested in end-to-end solutions who want some of the specific values of a codec that in software has much less computational complexity on the encode side especially, but very comparable, much, much better than 264, better at high-definition rates than 265. So, highly competitive in terms of its performance characteristics, but that also requires much less encode complexity, so a software solution for encode is viable in many use cases where it's not viable with the current next-generation standards that are popular like H.265.
Jan Ozer: Yeah, another theory of Moore is the bowling pin theory. So, when are you going to be ready to hit the US and what's the first bowling pin you're going to target?
Rob Glaser: Well, the first bowling pins are Chinese bowling pins, so our theory is get some of the end-to-end engagement going and we're just launching, literally Stars launched two weeks ago, which is the mobile solution and the TV solution is launching later this quarter. So the goal is get traction in China, get hundreds of thousands, hopefully, millions of users on the end-to-end solution, get the content flywheel spinning, and then in terms of where we go next, we're going to let the market give us feedback on it. Maybe the next markets will be Chinese diasporas, markets where there's Chinese language content is compelling to people. Maybe it's markets where the vendors that we're in business with in China have strong market positions. So, starting in China is one of the two most important markets in the world so it's a great place to start. It's unusual for a US company to start like that, but we had an existing market position, we have a great team and we have great partnerships together, and so that's the path we're on.
Jan Ozer: Let's look at the wayback question, I think we kind of covered the current stuff. Your company has been historical, what's the reflections from the RealMedia Player? For a while you had to have it, for a while it was the most hated player on the universe, my perception perhaps not yours-
Rob Glaser: We have many customers that still love the product, but certainly, when you create a very popular piece of software it gets controversial--talk to Facebook about that, right? Facebook used to be the most loved company on the planet, now because of the Russian hacking and privacy leaks and other stuff they're vilified, so when you get scale, it's almost inevitable that there're going to be people that vilify you and that's part of joy if you will of being big and having an impact.
Jan Ozer: Do you see your penetration in the states going to be dependent on a player or is it just going to be a technology type?
Rob Glaser: Well, the RealPlayer is still, by most measures, a very popular piece of software, millions of people use it a month. People download millions of videos a day with it and so it's worth a little bit. It's less of a streaming player and more of a download player, but it's still a very popular piece of software and in fact, we've announced that because we put RMHD encoding in the product as a background feature and our users in the first year we had it have downloaded and trans-coded into RMHD over 12 million files. So, we're starting to build up a little bit of seed core in there. In terms of activating that base, it's part of the longterm strategy, but it's not part of the short-term strategy. So the short-term strategy is deliver in China, create partnerships to start bringing that outside of China, and then the third phase of that is to leverage that bottom-up energy. So, two years from now I'd like to say we'll have a very vibrant ecosystem, player side, encoders, server, streaming, download whatever the delivery method is, but we're doing it in pieces and starting with China.
Jan Ozer: When do you approach me and say, hey, review our technology? When is it going to be relevant to people in the United States?
Rob Glaser: I would say if this conference a year from now where we'll have multiple set-top boxes and multiple chipset implementations, if we haven't done reviews by then we'll do them with partners, it'll be with, that's still speculative, but I feel confident that we'll have a good conversation to have. Codec ecosystems take a long time to build, as you know. So, we take the long view. We could build an excellent business just in China, but I think in terms of building a world-class business we obviously want it to be the world.
Jan Ozer: Okay, listen I know you're busy and I appreciate you taking the time to speak with me-
Rob Glaser: Great catching up as always. Hopefully, it won't be as long as it's been the last time.
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