RealNetworks has reported a $1.5 million Third Quarter profit or less than 1 cent per share. It marks the first time that Real has turned a profit in more than a year. Music revenue declined 7% to $38.8 million, technology products fell 8% to $47.4 million and games dropped 14% to $29.5 million.

Subscribers to Real's Rhapsody music service were down 50,000 to 700,000 in the quarter. The company said that a recently released iPhone app will be primarily used by existing Rhapsody subscribers, rather than attracting new ones. The company, which faces increasing competition from free ad supported music services, has warned of weaker fourth quarter results. One bright spot is the company's inclusion in Google's new enhanced music search.