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GUEST SPEAKER Thursday, February 15 Wayne Myamoto Systems Engineering Manager Cisco Systems

GUEST SPEAKER Thursday, February 15 Wayne Myamoto Systems Engineering Manager Cisco Systems Topic: “New Internet Technologies”. Key Success Factors. Technology. Distribution. Relationships. Technology. Changing the standard--core competence Proprietary streaming technology

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GUEST SPEAKER Thursday, February 15 Wayne Myamoto Systems Engineering Manager Cisco Systems

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  1. GUEST SPEAKER Thursday, February 15 Wayne Myamoto Systems Engineering Manager Cisco Systems Topic: “New Internet Technologies”

  2. Key Success Factors • Technology Distribution Relationships

  3. Technology • Changing the standard--core competence • Proprietary streaming technology • Targeted audio technology vs. video • Timing • Piggy-backed advertising and Internet craze • Beta testers

  4. Distribution • Ensured high quality • Consumer readiness • Timing--educated public • Predicted the market well • Thought leadership • Made it easy for customers to use • Gave away client-side software (switching costs)

  5. Relationships • Quality, Reliability, and Speed • Value, trust, and convenience • Reputation • Targeted larger customer base (non-techies) • Brand • Loyalty - decreased acquisition costs • Partnerships--> Advertising/ Content

  6. Real Networks, Inc. Real Broadcast Networks Content Context Streaming Software Infrastructure

  7. Key Risk Factors • Disruptive Technology • Channel Conflicts • Decreased Distribution Capability • Getting “Leap Frogged” • Resource Allocation • Competitive Dynamics • Microsoft’s response

  8. Trade-offs in RealNetworks’ Strategy Pros • Diversification of Risk • Full-Integration Cons • Competition with Customers • Spread too Thin • Microsoft Could Take Advantage of License Agreement

  9. RealNetworks Revenue Model Revenue Description Example Product sales Sell or license physical or Sell and license streaming information-based product media products Advertising Market other company’s Advertising on website, products or services carrying special promotions, Programming content Subscription fee Charge for regular receipt Selling annual upgrade of products or information subscription Commission or Agent, broker, or intermediate Programming customers Transaction fee charge. Can be a set fee or pay transaction fee based a % of cost on viewers Consulting and Charge for services provided. Services to design/develop service fee Set or variable streaming media content Membership fee Charge to belong to a group None

  10. Follow-Up June 98 Microsoft partner with broadcast.com July 98 RealNetworks charged that Microsoft’ WMP had sabotaged its RealPlayer in the US Senate Judiciary Committee’s hearing on the Microsoft’s anti-competitive business practices. Nov 98 Microsoft announced: “Though the companies have achieved some initial interoperability, RealNetworks and Microsoft have decided to accelerate their innovations and impro- vements in different directions.” Microsoft to pull out $140 Million+ from RealNetworks

  11. Follow-Up April 2000 Microsoft won’t include RealNetworks toolbar in IE 5.0 Yahoo! bought Broadcast.com ($5.7 Billion) Yesterday Larry Jacobson, former president of Ticketmaster and former president of FOX Television Network, named President of RealNetworks. Product: PC wirelessly sending Internet media to other consumer devices in a home Today RealNetworks has 125 Million subscribers and over 60% of market share

  12. THE PRIMARY OBJECTIVES OF • THE REALNETWORKS, INC. CASE STUDY WERE: • 1. TO DESCRIBE INTERNET STREAMING MEDIA, AND ITS • MARKET OPPORTUNITY. • 2. TO PROVIDE AN ILLUSTRATION OF A FIRM THAT • IDETIFIED A NEW TECHNOLOGICAL OPPORTUNITY, • AND ISSUES RELATED TO HOW TO PROVIDE VALUE. • 3. TO EXPLORE THE CHALLENGES FACE BY MANAGERS IN • DESIGNING, BUILDING, AND GROWING A SUCCESSFUL • INFORMATION AGE BUSINESS. • (COMING UP WITH A GREAT IDEA IS JUST THE FIRST • STEP IN THE PROCESS…)

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