Brash demands

RealNetworks has lost a high-profile Hollywood deal after becoming embroiled in a bitter dispute with Warner Bros. over Webcast branding, sources say, opening the door to rival Microsoft in the process. RealNetworks, by far the leader in streaming video and audio on the Web, had been in negotiations with Warner Bros. to Webcast the Drew Carey Show simultaneously with an airing of the TV program on ABC. The two companies had also discussed the use of RealNetworks technology and distribution channels for Metallica_s "S&M" album. Warner representatives said those talks collapsed, leading the company to turn to Microsoft_s streaming technologies instead. Details of the dispute were not disclosed, but studio executives said they involved brash demands by RealNetworks to promote its brand. The loss of the deal to archrival Microsoft is a clear blow to RealNetworks, particularly as industry figures show that the software giant may be gaining ground in the digital media market. Moreover, the fallout with a major Hollywood studio could bode ill for future deals in an industry that is infamous for exacting revenge. "We_re totally at war with RealNetworks," one Warner executive declared. While the Seattle company_s RealPlayer is used in most live Internet music and video broadcasts, Warner Bros. will give its business to Microsoft_s Windows Media player, at least in this instance. Warner, a subsidiary of Time Warner, refused to disclose the terms of its deal, saying only that Microsoft--in contrast to RealNetworks--"knows how to value content." The move indicates that some media executives are growing frustrated with RealNetworks_ ability to use its huge installed base of 88 million customers in negotiating online distribution deals. The company has built one of the most popular sites on the Web by aggregating content from some of the largest media organizations.