Rob Glaser Gets Real
At 20, one of the iconic companies of the Web is trying to reinvent itself with a consumer photo storytelling app. Its CEO tells why.
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RealTimes is cleverly named. It’s a cunning description of what the app produces: an instant mini-narrative from photos and videos, with a tuneful soundtrack. And it includes the name of the company behind it, a firm that was so early in the Internet that it was able to secure the priceless domain, Real.com.
Yes, RealNetworks is still around, and still led by its sometimes pugilistic founder, Rob Glaser, now back as full-time leader after a three-year break. With RealTimes the company is trying to woo the sizable demographic of busy parents who obsessively capture events in their children’s lives but don’t have time to cull through them, let alone edit them into snappy “RealTimes stories” for grandparents. The app itself is slickly done, identifying a cluster of files around a trip, a birthday party, or a boating outing, and then weaving some of those together into a clip that can be stored in the cloud for easy streaming by recipients, or sharing via social media or email. (Under RealTimes’ freemium model, those wishing clips longer than 30 seconds will pay a fee; paid users also get more cloud storage.)
Glaser says that with this product, he’s more excited about the company than he’s been in years. But then, the past few years have not been particularly kind to Real, which celebrates its 20th anniversary this spring. The company was part of the first graduating class of the World Wide Web, often mentioned in the same breath as contemporaries Netscape, Amazon, eBay and Yahoo. It got there by filling what was then a serious vacuum in the Web, and RealAudio Player (which later evolved into RealPlayer), was once a staple on everyone’s PC.
But the company’s original model, of providing a backend player for audio and video, has long been eclipsed. Real’s history features significant innovation. It was the first to stream a major league baseball game. Its Rhapsody product was a pioneer in streaming music services. (Real spun out Rhapsody in 2010 but still owns around 40 percent.)But the company’s impact is more impressive than its financials. Real’s current market cap is around $220 million; it was once measured in billions.
Glaser, formerly a Microsoft executive, believes that there is still plenty of opportunity for the Seattle-based company. A passionate sports fan (he owns a piece of the Mariners, and is one of the owners of the Professional Bowlers Association) and a dedicated political liberal (he was a major funder of Air America), he has stuck by Real even as its fortunes rose and fell. Those are his fortunes as well: he still owns 36 percent of the company. Glaser left his CEO post in 2010, and then — unhappy with his successors — returned to the job two and a half years later.
Last week Glaser visited the Medium offices in New York, not just to show off his new product but to look back on the company’s storied history. The interview is edited for length and clarity.
[Steven Levy] Tell me about how you developed RealTimes.
[Rob Glaser] When I came back to Real [as CEO] less than three years ago, one of the first things that I did was try to understand where the company was. Real, at its core, was still too much of a PC internet software company. We had to reinvent the business. I remember going to the team and saying, “Show me the IOS version of the player,” and they said, “We’re not working on one.” After I got off the floor, I said, “Why?” This was in 2012, this wasn’t 2007! They said, “Because we don’t know how to make any money from it.” If you’re only going to get into a business if you know upfront exactly how you’re going to make money, Facebook never would have gotten there, Twitter never would have gotten there, DropBox never would have gotten there, the list goes on. You can’t start by saying, until you know how to make money, you don’t start. So, I got that paradigm shifted, and we built RealPlayer Cloud, [a video sharing product] which now has 11.5 million users.
Now move the clock forward to late 2013, we asked, “OK, what are we going to do next?” When you think about problems to solve, I always go back to big, unmet needs. And if there’s a big unmet need in an area I can personally identify with and relate to, I’m going to do a much better job of figuring out how to make the product. I have three kids, and so I’m deep in the middle of these intense, super fun years where I’m taking pictures all the time. But the problem is, you’re taking all these pictures and you have too much stuff. And you’re at this stage in your life where you’re incredibly busy. So at the time when you’re taking the richest trove of personal content, you have the least time to organize it. We asked what can we do to make it super easy for people to organize their digital lives without it having to be a huge amount of labor. The more we got into it, the more we felt like we had something that will appeal to a very large cohort of people that are like us: very busy, taking pictures all the time, taking videos frequently and they don’t have a way to organize all this stuff or have permanent access to it.
There’s a lot of competition in this space, especially from Google and Apple, who own the mobile operating systems.
When you’re trying to create something really fundamental, there’s always the risk that people in the platform business will do what you’re doing. But in this case I’m not worried because we’re not simply a utility — we are trying to create something that powers social experience. Once people start creating stories, they get very emotionally connected to the product.
How will you get people to try this out?
We’re going to do the biggest marketing campaign we’ve ever done as a company, we decided to put a particular focus on families with kids. There are a little bit under 40 million families with kids where there’s at least one kid under the age of 15 living in the household in the US, so about 35 percent of US households are in that configuration. So we’re working hard to find ways to reach families, and moms and dads with little kids in their homes, and we have a set of partnerships and integrations we’re working on to make that easy.
What would success be for RealTimes?
We won’t know for sure until we put this in the wild, but early data from the beta users suggests that this is a very habituated product. You’ve probably downloaded a couple hundred apps onto your phone, but you probably only have ten that are in your wheel. We want to be one of those ten main channels. As long as we are your go-to place for doing interesting things with your personal photos or video, we’ll be on the path to have this thing be not just an interesting-sized business, but something fundamental.
Since Real Networks is twenty, let’s look back on its history. How did you light on Web media?
I was always fascinated by the intersection of technology and media and was looking at two different ideas, one of which was creating technology to enable real-time streaming of content, which became RealAudio. The other idea was to actually create an interactive TV channel based on the 500-channel cable universe that was being contemplated. We were having these conversations in the summer of ’93 when I left Microsoft. The magic moment for me was when I went to an Electronic Frontier Foundation board meeting in in Austin, where [Internet pioneer] Dave Farber said, “You’ve got to try this Mosaic thing,” and showed me a creaking version of the NCSA web browser. I immediately went home and got a bonded ISDN line, and started fooling around with Mosaic, and it was like, game over, this is the future. By ’94 we created the prototype that became RealAudio and we jettisoned all the TV stuff. Then we got into a race because we were scared shitless that we weren’t the only people who saw this happening; we thought there’d be a tremendous difference between being the first people to create a content streaming system that worked, versus being the second.
You hung on as an independent company when some others — I’m thinking of Mark Cuban, who had a similar business — cashed out for billions during the 1990s boom. Do you look on that decision with regret?
There were three ways to play the first bubble. One was to do what Mark [Cuban] did — find a safe harbor and sell and hedge enough of your sale so you’d be able to get out, even if it came crashing down a week after Thursday. For every broadcast.com success story, however, there is a story that didn’t end so well. A company that was started by a good friend of mine sold for $100 million, but by the time the lockup expired, the acquiring company’s entire stock sold for less than $10 million. So that’s one door. The second door is to do do what Steve Case did — AOL got up to a crazy valuation and he collared it, in effect, by merging with Time Warner.
The third thing, the path we took, was staying independent. It wasn’t like a pig-headed thing where we said we’ll never sell, but we certainly didn’t pursue selling to the exclusion of running the business. We had a unique situation — in addition to the bubble bursting, we had a competitor who broke the law in how they competed with us. I don’t regret not selling the company: I’m financially fine, I’m very lucky, so I have nothing to complain about there. But I do regret that when it came time to rebuild the company, post the Internet bubble bursting, rather than going back to our roots and making a great product, we did a lot of different things that were more opportunistic in nature. Some of those things ended up being very commercially successful. We’re doing fine, but the thing that I regret doing is not making a RealTimes, not stepping back and saying, “What are the key problems we can solve whether or not they are an extension of our business?”
You were early in streaming music with Rhapsody but haven’t managed to keep your lead. What happened?
We were way too early. Streaming dominates now and people realize that access is more important than ownership. We knew that was going to happen in 1999, or 2000, when we started in that business. But it took 15 years when I thought it was going to take five years. Yes, we’re more Avis than Hertz, but our 2.5 million subscribers ain’t chump change. Have we done the best job of having brand recognition compared to Pandora or Spotify? No, we could do a much better job there. But Spotify has probably gone through like a billion plus dollars in capital to get to the position they’re in; we’ve been much more capital-efficient. Would I love to be number one? Of course I’d love to be number one.
Lightning round — you’ve had close relationships with some of the huge companies. So let’s play word association. First, Apple.
Massive respect for what Apple did both in the Steve [Jobs] period and now in the post-Steve period in reinventing the company. Apple is a great example of the paradigm that if you build great products, they will find a home and find a market. Apple products used to be niche products, but now with the iPhone and iPad, they’re horizontal products.
What was your relationship with Steve?
We probably had eight or ten meetings through the years. Obviously he was brilliant, he was ruthless. The one question about his reality-distortion fields is the degree to which he believed what he said, or didn’t believe it but thought it made a good story. Even people who know him much better than I do weren’t always sure.
Google.
Because Google is very Microsoft-like in a lot of ways, I found it very natural to work with it. A bunch of super hardcore tech guys who think that by being super hardcore tech guys, they have a natural ability to take over the world, and as long as you know that about them, you can do a lot of things with them. Over an eight- or nine-year period, we distributed over a billion pieces of Google software, because with the RealPlayer, we had a very viable PC distribution channel. So we had something of value to them, which was distribution, and they had something of value to us, which was money.
One more: your former boss Bill Gates.
One of the most brilliant, hardcore guys that I’ve ever had the chance to work with, and I worked very closely with him for 10 years. I don’t work very closely with him now. He took it very personally when we had the litigation. It was a certain place in time where Microsoft felt threatened by anyone that was platform-y in that world. But I think the work that Bill and Melinda’s foundation does in global health is phenomenal. I wish him well.
Cover shot courtesy Real Networks.
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