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Real’s revs look good in off-black

Rhapsody revenue grows 172%

Digital media company RealNetworks nearly made it into the black last quarter as it achieved record revenue and was kept from profitability only by the costs of its ongoing antitrust lawsuit against Microsoft.

Growth was driven primarily by big increases in its online music and games services. Company saw revenue from its Rhapsody and premium radio services grow 172% to $21.6 million, and revs from games sales and subscriptions rose 156% to $10.1 million. Video subscription revenue fell slightly to $29.1 million, while business products and services continue to be a smaller part of the company’s mix, with revs falling 8% to $12.8 million.

Overall, RealNetworks lost $1 million in the fourth quarter on revenue of $72.5 million, down 81% and up 34%, respectively. Excluding $3 million in litigation costs from the Microsoft suit, RealNetworks would have made a $2 million profit.

For the full year, RealNetworks revenue rose 32% to $266.7 million and net losses rose 7% to $23 million.

Looking forward, company expects revenue to increase to $310 million-$320 million in 2005 while it maintains its current trend of profitability excluding litigation costs.

Shares in RealNetworks closed flat Thursday at $5.95 after earnings were announced.