Apple's iPod+iTunes and Microsoft's new Zune products follow the wrong business model, according to RealNetwork's CEO Rob Glasier. During the company's quarterly earnings conference call, he said that Microsoft's decision to follow Apple's lead and develop a closed media player and content download service was an over reaction, and provides a new opportunity for the Rhapsody music service.

Mr. Glasier commented "We think this is a case where our technology competitors have literally thrown the baby out with the bath water. Microsoft's decision to join Apple and the vertical camp provides as a great opportunity to partner with other companies who are open to it and agree with our Rhapsody software."

RealNetworks' Rhapsody is an Internet-based music subscription service that supports several different portable digital music players. In comparison, Apple sells individual songs at its iTunes Music Store instead of requiring customers to pay monthly fees to be able to continue to listen to the music they download. Songs purchased from the iTunes Music Store use a copy protection scheme that only works on the iPod. Microsoft's Zune players and service will likely be closed, just like Apple's.

Prior to the announcement of the Zune product line, Microsoft licensed its software and technology to MP3 player manufacturers instead of producing its own products. With the introduction of Zune, however, many of these partners feel snubbed, and RealNetworks hopes to lure them to its Rhapsody service.

"We think a lot of consumers will want Rhapsody," Mr. Glasier says, "Because it gives them the best way to get more of the music they love."