ROB GLASER believes that the RealNetworks-Compaq deal has a certain symbolic significance

Compaq has decided to include RealNetworks software on its computers, giving the Internet media company an important outlet to consumers as it builds steam for its online subscription service. Says RealNetwork’s COO Larry Jacobson, “New home PCs from Compaq will include RealOne software, which can be used for playing video and audio over the Internet as well as recording and storing music on a computer.” Compaq will also include icons and promotions for the RealOne online subscription service, which lets users get exclusive sports, entertainment and other content for a monthly fee. “It is certainly significant symbolically,” said Rob Glaser, RealNetworks CEO and chairman in New York. He added that Real also has deals for some other products with Sony and Gateway.

RealOne will not be shipped on new Compaqs until next March, when a final version of the software is released. In the meantime, Compaq will ship the latest versions of the RealPlayer and RealJukebox programs. Deals with PC makers are key to get RealNetwork’s software in the hands of consumers as it competes against Microsoft’s Windows Media Player for dominance in the digital media industry. Media Player, is given a prominent place in its Windows XP operating system, which ships on virtually all new PCs.

The RealOne player will also be the default software for playing CDs and MP3 music files on Compaq PCs. Moreover, an “entertainment” button on the Compaq keyboard will direct users to the RealOne site. “We have all this great content now with RealOne that we can use in a promotional way,”says Glaser He however declined to say how many new subscribers Real hoped to get out of the deal, which includes revenue-sharing provisions with Compaq.