That was a weird announcement
from Real. I agree that it isn't a matter of transcoding. It's all about who collects, and how the money is collected, via a portable device, for the company that paid for the licensing of the content. The incompatibility between devices is VITAL to that end.
What they are suggesting, is that they can over-ride Apple's DRM. I wonder if this latest salvo is a result of their failed attempt to merge their interest in this game with Apple a few months ago. (The Glaser to Jobs email that was leaked)
Anyway, no love for RealNetworks in this neighborhood. Cell phones, and remote car locks don't work very well in any proximity of their building on Elliott Avenue.