Games, music tune RealNets results

Results reflect co.'s shift to selling content to media player users

Digital media company RealNetworks reported a 32% spike in revenue for the second quarter thanks primarily to strong growth for its online music and vidgame subscription services.

Results reflected Real’s continuing shift away from selling business products and services based on its digital media technology, which is being eclipsed by Microsoft’s Windows Media and other formats, and toward selling content to users of its media player.

While B2B revenue declined 25% to $12.4 million, consumer revenue surged 60% to $53 million, bringing company’s total revenue to $65.5 million. Net loss decreased from $9.6 million a year ago to $4.6 million

Excluding the costs of Real’s anti-trust lawsuit against Microsoft, net loss was $1.9 million.

Recent acquisitions that led to the launch of its Rhapsody music subscription service and GameHouse vidgame service brought music revenue up from $1.7 million to $15.6 million and games revenue from $2.7 million to $8.3 million.

Company had 1.4 million subscribers to its various consumer services, up from 1.3 million at the end of the first quarter, and 550,000 subscribers to its music services.

While Real has had strong growth in the gaming space and is one of the leaders in music subscriptions, its pay-per-download music store, which launched in January, has made little headway against market leader Apple iTunes. But company announced earlier this week that it has developed software allowing downloaded songs to play on any device, including the popular iPod, which currently only works with iTunes.

Company said it expects to reach net profitability, excluding litigation costs, by the fourth quarter of this year.

Along with earnings, Real announced it has hired former XM sat radio marketing veep Robert Acker as VP of its RealPlayer business

RealNetworks shares closed down 2% at $5.58 Wednesday before earnings were released.

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