Real Says Digital Revenue Up

Real Networks says it generated more than $12.3 million in digital music revenue in the first quarter of this year -- a 55% increase over the $7.9 million it generated in the fourth quarter of 2003.

Included in the digital music revenue tally is money generated from its Rhapsody on-demand subscription service, the RealPlayer Music Store and the company's premium radio offering RadioPass. First quarter music revenues a year ago --- which do not include Rhapsody or RealPlayer Music Store -- totaled $831,000.

Real now has more than 450,000 Rhapsody and RadioPass subscribers. Real claims to be the No. 2 music service behind Apple Computer's iTunes Music Store, which earlier in the day said it has sold over 70 million downloads in its first year of business.

Roxio Inc. -- parent of Napster -- is yet to announce its first-quarter numbers. However the company said last month that it expects music revenues to total around $5.5 million.

Overall, Real posted a $10.4 million (6 cents per share) loss for the quarter -- almost double its loss in the fourth quarter of 2003, and more than three-times its loss it the first quarter of last year. Total revenue was $60.4 million -- up 29% from the first quarter of 2003 and up 12% from the fourth quarter of 2003.

Real says the loss includes more than $7 million in expenses related to the unwinding of a sports-related subscription deal and anti-trust litigation against Microsoft. Shares in Real closed down 7% ahead of the announcement, which was made after the close of the stock market today. The stock ended the day at $6.09.