RealNetworks, Napster Swap Fortunes

Before Apple (AAPL Quote) had its iTunes, Napster (NAPS Quote) was the cool kid of online music, while RealNetworks (RNWK Quote) provoked user frustration with its clunky, ad-infested media player.

But the companies chasing the Apple online-music kingdom have swapped reputations, at least on Wall Street: Real has made nice strides to grow its diverse media business (and declutter its media player, thankfully), while Napster is losing favor after bleeding cash and customers.

The two companies, both vying to lure music fans from Apple's tight grip, are at a disadvantage without a seamless connection to the iPod, the No. 1-music digital music player on the market.

Likewise, "they're both dealing with the fact that the subscription model is still looking for its legs," says Mike McGuire, an analyst with Gartner. Subscription services charge about $15 a month for unlimited music, as long as the customer continues to pay, while iTunes sells music downloads for keeps by song or album.

With the oomph of its brand behind it, one would've expected Napster to have a leg up on Real. But now it looks like it barely has a leg to stand on, short of getting acquired. The company soared 38% in the weeks after hiring a banker to explore its options, but the lack of news regarding interested shoppers has started to weigh on shares, and the stock has fallen about 11% this month to $4.37.