RealNetworks hemorrhaged $6 million last quarter
solely defending its DVD-copying technology
as Hollywood giants seek to bury the controversial system.
That massive legal bill torpedoed profits
in its media division
transforming last year's $9.7 million gain
into a $1.8 million loss.
At the core of this expensive battle sits Facet:
a Linux-powered hardware device
billed as the next evolution of the DVD player.
It promises permanent digital libraries
ripped from physical discs users legally own.
Hollywood studios argue this threatens
their DVD sales and digital download strategies,
branding the copying illegal under copyright law.
RealNetworks counters its security measures
prevent piracy
and asserts studios already abandoned
the copy-protections Facet bypasses.
For RealNetworks
Facet represents more than software—
it’s a gateway into consumer hardware partnerships.
Licensing this tech to manufacturers
could fund a strategic retreat
to friendlier markets like music and gaming.
Consumers weary of restrictive copyright rules
see RealNetworks as either
a rare corporate champion for fair use
or simply a well-funded legal battering ram
forcing Hollywood to justify its piracy claims.
A federal judge now weighs
whether to permanently halt RealDVD and Facet
following closing arguments in California.
Her decision could reshape
the boundaries of digital ownership.
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