Repetition may be the key to a good musical hook, but for RealNetworks (NASDAQ:RNWK), it's resulting in anything but a hit. The digital media software specialist posted a loss of $0.01 a share in its December quarter. It represents the 11th consecutive quarterly deficit for the company -- but this one comes with an asterisk, as the company would have returned to profitability if not for the $3 million it coughed up in antitrust litigation expenses.

The red-ink consistency is even more frustrating when it's stacked up against the reality that the company had a dozen straight quarters of profitability before its ears started to bleed. While RealNetworks may finally be ready to turn things around, it's easy to see why shareholders should be demanding more out of the company.

This should be the company's time to capitalize. Opportunity is knocking now that Microsoft (NASDAQ:MSFT) has been smacked down in Europe, being forced to ship its operating system without its Windows Media Player software bundled in. Apple Computer (NASDAQ:AAPL) is in the same position with its QuickTime offering, only Apple doesn't need to answer that knock anymore. It sneaked in through the back door with its iPod player and iTunes download store, giving it a dominant role in digital music that has it booming on all fronts.

RealNetworks closed out the year with the highest revenues in its history -- and with 10 straight quarters of top-line growth -- and now it seems that the bottom line is about to get in sync.

Yet there's one thing about RealNetworks that's been bugging me in recent years: The company's profit range has been way too narrow. Over the past five years, its quarterly earnings have fallen between a loss of $0.06 and a profit of $0.06 a share. That's because the company has way too many shares outstanding -- 170 million, to be exact.

With that many shares outstanding, RealNetworks will need a substantial spurt to produce more than just pennies per share if it does, in fact, turn the corner in 2005. No, I'm not suggesting a reverse stock split. But the company does have a top-heavy balance sheet that sports $2.14 a share in cash. At today's prices, that would be enough to buy back a third of its shares outstanding.

But I don't think any such buyback will happen. Companies love their green security blankets, and RealNetworks isn't in the clear just yet. Microsoft is still a media software beast, and although Apple's digital music business is thriving, the same can't be said for everyone else in the sector, including Napster (NASDAQ:NAPS) and RealNetworks' own fledgling Rhapsody service.

Still, I'd like to see the company put that idle cash to work, at the very least through logical acquisitions that would be accretive to earnings. As it stands, the $4.5 million in interest income that the company generated for all of 2004 isn't making much of a dent, given the huge number of shares outstanding. RealNetworks has the money to buy itself a bigger stage. Let's see whether it does just that.

Longtime Fool contributor Rick Munarriz is a fan of digital media and enjoys rooting for RealNetworks, even though he doesn't own shares in any of the companies mentioned in this story. He is a member of the Rule Breakers analytical team, seeking out tomorrow's great growth stocks a day early.