Apple slammed for piracy-fuelling iPod

Rob Glaser has made his peace with Microsoft's Bill Gates. Now, the RealNetworks chief executive is turning up the rhetoric against another technology icon: Apple CEO Steve Jobs.

At the Digital Living Conference in San Francisco on Monday, Glaser told a packed hotel ballroom that Jobs and co's refusal to make the iPod compatible with music services other than Apple's iTunes was "pig-headedness". Glaser also said Apple's unwillingness to co-operate with other online music vendors promotes piracy of copyrighted materials and will eventually draw the wrath of consumers.

These are heady times for Glaser and his internet multimedia company, which announced in October that it had reached a favourable settlement with Microsoft on the $1bn lawsuit RealNetworks filed in 2003.

Under the deal, Microsoft agreed to pay $460m in cash to settle the antitrust claims and will also pay $301m to support RealNetworks' music and game efforts. In addition Microsoft will promote RealNetworks' Rhapsody subscription music service on its MSN web business.

Perhaps Jobs unknowingly helped RealNetworks and Microsoft find common ground. In 2004, Glaser appealed to Jobs to make the popular iPod compatible with other music services. Microsoft has long sought to strike partnerships in the digital-music arena to help it challenge Apple's enormous lead in the sector.

Jobs responded by telling his shareholders that a deal with RealNetworks simply was "not worth it". Glaser didn't let that stop him. In July 2004, RealNetworks released a version of its music download service compatible with Apple's iPod - without the permission of Jobs and co. Apple has called it "hacker tactics" but hasn't filed a lawsuit.

Following Glaser's presentation he was asked whether Apple's unwillingness to allow others access to the iPod was hurting RealNetworks.

Glaser said: "We think Apple Computer, and Steve personally, are making a mistake by making the software proprietary," noting that RealNetworks would continue catering to users of Macintosh computers. "There's no reason we should penalise Apple customers for Steve's pigheadedness."

In an interview following his presentation, Glaser called for the music industry to pressure Jobs into opening up the iPod to other online music vendors.

He said: "Steve makes for a good pinata because he's taken a position against interoperability." These people "should be pressuring him to change because they have leverage over him. Apple being on its own in term of interoperability makes piracy more compelling for consumers. Because, hey, if I take all my MP3s from this illegal site or that illegal site, they'll work on the iPod or anything else. Whereas if I buy them legitimately, they'll only work at one place".

Glaser said consumers could blame Apple if they can't hook up their music with their other digital content should such convergence become popular.

Glaser was at the conference to debut a revamped Rhapsody digital music service, which will let people search and listen to its catalogue of songs from a web page, instead of requiring them to download software. RealNetworks is hoping an overhauled Rhapsody site will help it stand apart from competitors, which often require users to download software before they begin listening to music.

In an effort to draw attention to the site and compete with iTunes, RealNetworks is allowing visitors to stream 25 songs for free.

Glaser told the audience following his speech: "I don't think anyone offers anything freer than 25 [songs]. We're the cost and price leader."

But can RealNetworks make money with such a strategy?

Glaser said: "We already know from having done six months of work that the economics of getting consumers to use free services are good."

Among the strategies available, RealNetworks can sell ads to the site or steer customers to premium services that could carry a charge.

Glaser said: "Google had a ubiquitous strategy before a monetary strategy and last I heard it worked out for them."

Greg Sandoval writes for CNET News.com