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Pay for Play boosts RealNet

Internet audio and video giant shows first quarter profit

RealNetworks is seeing the first major sign of return from its strategy to focus on charging Internet users to view programming through its RealOne service.

The Seattle-based Internet audio and video giant Tuesday posted a first quarter net profit of a little more than $1 million, reversing a year-ago loss of $24.4 million.

Revenues totaled $47.3 million, down from $50.4 million for the three-month period a year ago, due to a slump in online advertising spending. Ads contributed $1.6 million to the company’s revenues, making up 3% of Real’s first quarter earnings.

But it was in its subscriptions that RealNetworks saw the biggest gain, an increase of 35% over the fourth quarter to $13.6 million.

RealNetworks now boasts 600,000 subscribers that pay to use RealOne. Service features exclusive video and audio fare from ABCNEWS.com, CNN, NASCAR.com, FoxSports.com, the NBA, Major League Baseball and the Weather Channel, among others.

Roughly 270 million Netizens use RealNetworks’ software, which it hopes to turn into RealOne SuperPass subs.

Real is also trying to gain some traction in collecting licensing fees through pacts with digital video recorder, handheld device and cell phone hardware manufacturers like TiVo, Compaq and Nokia, which have agreed to incorporate the RealOne player inside their devices.

“These results provide further evidence that we’re moving in the right direction,” said Rob Glaser, chairman and CEO of RealNetworks.

RealNetworks’ stock rose 44¢ Tuesday to close at $7.24, a gain of 6%.

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