How did a Seattle startup make audio stream in 1995?
Rob Glaser spent ten years at Microsoft and left as a vice president in 1993. In February 1994 he founded Progressive Networks in Seattle, betting that the internet would end up carrying radio and television.
The obstacle was bandwidth. Most people online in 1994 dialed in at 14.4 kbps, a speed at which a three minute song took close to half an hour to download. Glaser's team stopped trying to move the whole file. They compressed audio hard, sent it in a steady trickle, and buffered a few seconds ahead so playback could start while the rest was still arriving.
In April 1995 Progressive Networks shipped RealAudio 1.0 along with the RealAudio Server. It sounded like a weak AM signal, and it worked. Click a link, wait a moment, hear sound. Radio stations, news organizations and sports leagues picked it up within a year, and in 1997 the company renamed itself RealNetworks and added video to the player.
How big did RealPlayer get at its peak?
RealNetworks went public on the Nasdaq in November 1997 at $12.50 a share under the ticker RNWK. The stock rose almost 50 percent on its first day and left the company valued near $600 million, which in 1997 made it one of the more convincing internet businesses on the market.
By 2000, more than 115 million people had registered a copy of RealPlayer. A Media Metrix study reported by Variety in 2001 found that in November 2000, 28 percent of United States home computer users had used RealPlayer, against 22 percent for Windows Media Player and 4 percent for QuickTime.
The money followed for a while. Net revenue reached $241.5 million in 2000, up 84 percent on 1999. That was the top. The company's own annual report for the next year put 2001 revenue at $188.9 million, and it kept sliding while the audience for streaming kept growing.
Why did so many people hate the software?
The reputation was earned. The free player worked as an advertisement for the paid one: pop-ups on launch, a download page that buried the free link, and a Message Center component that loaded at Windows startup and served promotions whether or not anyone had opened the player.
It also took file associations from other players, planted itself in the system tray, and left pieces behind after an uninstall. On a dial-up line the playback itself was a negotiation, with the buffer counter restarting every time the connection wobbled. Anyone who remembers 56k modems remembers that counter.
Then came November 1999. Privacy researcher Richard Smith found that RealJukebox, RealNetworks' music companion with roughly 13 million registered users, was sending the company a unique identifier for each installation along with details of the CDs played and the music stored on the drive. Glaser called it a "mistake", RealNetworks patched the software, hired a privacy officer and set up an outside advisory committee. The suspicion stayed.
What did RealNetworks win from Microsoft?
Windows Media Player shipped with Windows. That was the whole argument. A casual user who wanted to play a video file already had a player, and it asked for nothing in return.
In December 2003 RealNetworks sued Microsoft in the United States District Court in San Jose, seeking about $1 billion and arguing that bundling Windows Media Player with Windows was an illegal use of the operating system monopoly. The European Commission reached a similar conclusion about the bundling in its decision of March 2004.
On October 11, 2005 the two companies settled for $761 million: $460 million in cash against the damages claim, plus $301 million in cash and services over 18 months, together with a deal to promote RealNetworks' Rhapsody service on MSN and its games through MSN Games and Xbox. "Today we're closing one chapter and opening a new one in our relationship with Microsoft," Glaser said in the joint announcement. The payment cleared. The users did not come back.
Why did Harmony fail against the iPod?
RealNetworks' other bet was on Apple's hardware. In 2004 it launched Harmony, which reverse engineered Apple's FairPlay copy protection so that songs bought from RealNetworks' store would play on an iPod.
Apple's response, issued in July 2004, did not hedge: "We are stunned that RealNetworks has adopted the tactics and ethics of a hacker to break into the iPod." Apple added that "when we update our iPod software from time to time it is highly likely that Real's Harmony technology will cease to work with current and future iPods." That is what happened.
The subscription business had better thinking behind it. Rhapsody arrived years before Spotify, was spun out of RealNetworks in 2010, took the Napster name in 2016, and was sold to MelodyVR for $70 million in 2020. None of it ran through the player.
Who owns RealPlayer today?
RealNetworks is private, and Glaser owns it. After the share price spent 2022 under the Nasdaq's $1 minimum, Glaser bid for the stock he did not already control and closed the purchase that December at $0.73 a share. The stock was delisted.
What is left is not a streaming company. RealNetworks sells SAFR, a computer vision platform for live video, and runs the GameHouse mobile games business. Its KONTXT messaging analysis unit, which the company says has blocked more than eight billion spam and scam messages over eight years, went to TransUnion: announced on February 2, 2026 and completed on April 1, 2026.
RealPlayer itself is still published. The Windows build reached version 25 during 2026, with Android and iOS apps alongside it, and real.com lists a free tier, Downloader Express at $24.99 and RealPlayer Plus at $39.99. It is a video downloader and media library now, roughly the shape Winamp settled into. Glaser's forecast about streaming was correct in every part except the part with his own company in it.
Frequently Asked Questions
Does RealPlayer still exist in 2026?
Yes. RealNetworks still publishes RealPlayer, and the Windows version reached release 25 during 2026, with Android and iOS apps as well. The basic player is free, while RealPlayer Plus costs $39.99 as a one time purchase.
Why was RealPlayer so hated?
RealPlayer, first released as RealAudio in April 1995, wore users down with launch pop-ups pushing the paid version, a Message Center that ran at Windows startup, seized file associations and a messy uninstall. The RealJukebox case of November 1999, in which the software sent listening data and a unique installation identifier back to RealNetworks, turned irritation into distrust.
How much did Microsoft pay RealNetworks?
Microsoft paid RealNetworks $761 million in October 2005 to settle the antitrust suit RealNetworks had filed in December 2003 over the bundling of Windows Media Player with Windows. The package was $460 million in cash plus $301 million in cash and services spread over 18 months.