Streaming video company RealNetworks Inc. today announced a major deal with European powerhouse Vodafone Group plc, a move that many in the industry say puts RealNetworks at the head of the wireless video movement.
“This is the largest commitment by a carrier in the world” to streaming video, said Richard Doherty, research director with the Envisioneering Group. “Overnight it will make RealNetworks the de facto standard.”
Under the extensive agreement, Vodafone will use RealNetworks’ streaming video technology to offer video services over its Live! wireless data service. Vodafone will install RealNetworks’ Helix server and gateway into its network, and will standardize on the company’s RealOne player for its mobile phones. RealNetworks also will provide downloading and asset management technologies and middleware software. Vodafone counts about 120 million customers across 28 countries.
“We think this is a pretty significant win for us,” said Ian Freed, vice president of RealNetworks’ mobile products and services. “We think it will be a catalyzing event for the content provider market.”
The deal does not however mean all of Vodafone’s territories will launch streaming video technology right away. The carrier has no specific commercial launch date for its core territories, but it quietly has begun offering the RealNetworks service in Italy and Germany. Further, the deal does not guarantee that carriers like Verizon Wireless, in which Vodafone owns a minority stake, will launch RealNetworks streaming service.
“We certainly think it opens more doors for us at Verizon,” Freed said.
Nonetheless, the deal represents a major affirmation for the streaming video market, an area with plenty of hype over the years but so far little substance.
“Every carrier wants new services,” said the Envisioneering Group’s Doherty. Streaming video “is the next opportunity beyond camera phones.”
Many point to RealNetworks’ content provider deals as a major factor in Vodafone’s decision. RealNetworks boasts that its content partners create more than 1 million hours of streaming content per month for its service, and that such content can be easily modified for distribution on wireless devices.
“RealNetworks has the advantage,” said Seamus McAteer, managing partner and senior analyst at the Zelos Group. “It comes to the table … with established deals.”
The RealNetworks/Vodafone deal also highlights the maneuvering in the streaming video market. RealNetworks supports a variety of streaming video file types, including the mobile version of the MPEG4 standard approved by the Third Generation Partnership Project. Most other streaming video companies have standardized on the MPEG4 specification, but RealNetworks also supports its own file types as well as rival Microsoft Corp.’s Windows Media standard.
Other streaming video players can be divided according to their support for various standards. Apple Computer Corp., which offers the popular QuickTime video player, recently announced it will support the 3GPP’s version of MPEG4-meaning that wireless companies could have access to QuickTime content. Microsoft continues to support its Windows Media format in its mobile operating systems, but has had little success selling streaming video infrastructure to wireless carriers. And wireless streaming video company PacketVideo Corp. supports the 3GPP and Windows Media specification, but not the RealNetworks file type.
As the streaming video market begins to gain steam, it seems RealNetworks and PacketVideo remain the industry’s two main providers. RealNetworks counts deals with about 15 wireless carriers, including Vodafone, as well as a major handset agreement with Nokia Corp. Nokia expects to sell about 10 million mobile phones with the RealNetworks video player. PacketVideo counts about 8 official carrier deals, including one with heavyweight NTT DoCoMo Inc., and has about half a dozen announced mobile-phone deals with about a dozen more in development. Further, both RealNetworks and PacketVideo are offering their video players for download through their respective Web sites.
“One would have to give the edge to RealNetworks at this stage,” said the Zelos Group’s McAteer.
However, McAteer said, the industry is still in its infancy, and there are a variety of smaller video players like Oplayo and HelloNetworks to stir things up.
“It’s not game over,” McAteer said.
