Real losses hide subscription growth

The company posted a net loss of $9.6m, up from $1.6m last year, after taking a $7.1m charge against excess office facilities it bought prior to the technology crash. However, revenues increased 13% to almost $50m, which the company said was linked to an increase in subscriptions.

RealNetworks is now focusing on selling subscriptions that allow web and mobile users to access premium content, such as audio and video services, to help offset declining software sales.

The shift in strategy towards subscriptions appears to be paying off - it is the first time since late-2000 that Real has generated double-digit revenue growth.

It recently inked a deal to support Vodafone live! by allowing subscribers to the service to access rich content. This also helped increase revenues, which Real will be hoping will start to exceed the $50m mark in the coming quarters.

The company has been acquisitive in recent months and has the means available to look for further buys. It bought online music group Listen.com in April for $36m in a bid to rival Apple's iTunes and other emerging subscription services. The deal will increase operating losses by about $2m per quarter, decreasing over the next "several" quarters.

RealNetworks CEO Rob Glaser said: "We continued to drive our paid content business forward, including introducing a new product, RealOne Rhapsody, that we believe will position RealNetworks very well for the future of the digital music business.

"We also made major progress in mobile media systems software, laying the foundation for what we believe is a very promising opportunity."

30 June 2003:

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