How will you compensate if you lose it?
It represents less than 2 percent of our revenue. Depending on the circumstances, we could end up more profitable than we are today. Baseball has been a great relationship, and it would be great if it could continue.
Momentum is building for original video programming (such as AOL's new sports show) and movie services online. Where's Real going to get its next wave of subscribers on this front?
[Laughs] I appreciate the question -- this is in a context in which we just announced 46 percent quarter on quarter growth in our fast-growing content area, so I don't think that the biggest question I lose sleep about is what wave is going to drive this forward now. We have several waves driving this forward now, music most prominently.
In other words, how committed are you to video streaming?
Long-term, video is going to be more important than audio in aggregate. By working with the industry, we cleared more than 400,000 unique pieces of content in music that we're able to offer consumers a lot of flexibility on. They can stream it; they can purchase it.
The biggest thing that has to happen from the scale that music is at is to get the content flowing -- be it old TV archives, be it movies. Folks at services such as Movielink are off to a nice start. But if you look at the number of movies Movielink has, and you compare it to the number of tracks of music, Movielink is sort of where music services were in 1999 or 2000. Maybe a little bit ahead of that.
The big message we put to all these content industries is: "Look, the lesson of the music industry is if you don't get ahead of the curve and make your content available for legitimate services, consumers will find a ways to get it, anyway, to your detriment." As I've discussed with guys such as Jack Valenti, the danger is that they'll move too slowly.
Does Real have any plans in the offline world, such as in digital cinema, as does Microsoft?
The digital cinema initiatives today are mostly stunts. Every once in a while, we'll do a marketing stunt. But long term, digital distribution will impact everything, be it taking HD (high-definition)-quality content and flowing it out to cinemas and not having to make and ship 35mm prints.
I've had a number of fun conversations with my buddy (Dallas Mavericks owner) Mark Cuban, and on that front, he's a big believer -- so much so that he bought a theater chain to experiment in that world. That world's going to come, and we'll always be happy to have our platforms and technologies used in that area. But in terms of that being a primary business in the next year or two, I think that it's still the early days yet for that business. We'd rather just let people build technologies and services with our technology rather than get involved with it first-person.
As the market changes, are there pieces Real is missing? Are there other potential acquisitions on the horizon?
We will be active but selective. I look at what we did with Rhapsody -- best product in the business -- and under-distributed. In that case, we had the opportunity for the perfect fit. When there will be opportunities like that, we will be active. There will be situations in which there will be an ingredient piece, something we can add to other things we're working on that will scale things up. But I don't think we'll be like the old Computer Associates International, for which acquisition is the fundamental growth strategy.
