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As convergence brings PCs and TVs together, will the future go boom or bust?

There was a time when electronics knew their place. The television nestled happily in the living room or bedroom, the computer resided complacently in the home office or den, and the only thing digital in the kitchen was the coffeemaker’s built-in timer. Now, PC makers and entertainment purveyors have a new message: There’s really no difference between a high-end computer and a tricked-out home theater system; so why not mix and match?

Computer users have long added entertainment functions to their PCs. Of course, PCs make a great music hub for CD mixing and MP3 downloads. The PC is the primary photo fixing, sending, and storing device. Newer models also play DVDs with digital pictures. And there are several tuner cards on the market that let users watch TV and listen to the radio.

It’s really not that hard to bring digital entertainment to your den or home office. The trickier part is bringing computing into your living-room entertainment center.

Major manufacturers and retailers have strengthened their push to bring digital entertainment into the living room’s analog environment in the last few years. As consumers get more comfortable burning CDs, using personal video recorders (PVRs), and e-mailing digital photos of the kids to Grandma, companies from both entertainment and computing universes are ushering them even further into the digital realm with hardware like the HP Media Center PC and software like Apple’s iLife.

Because of this, digital citizens, or at least the early adopters, have found a plethora of choices for revamping their entertainment scene. Along with digital photography, they can burn DVDs, roam the Internet, play PC-based or console games, and edit digital video, all from the comfort of the couch.

But let’s face it, wowing early adopters has never been a difficult task for electronics makers. Putting a camera on a PDA or a GPS system on a digital watch is a guaranteed way to draw a certain number of feature-hungry geeks. (After all, it’s not as if they increased production on those robotic dogs for nothing.) The challenge for convergence advocates now is to win the heart, mind, and (especially) wallet of the average shopper, the kind who is this close to finally getting that TiVo PVR system.

To get Mom and Pop to boost their computing power, the next year should prove to be a rocky one for some companies and retailers as they finally confront what’s really needed to bring digital entertainment into the living room. The obstacles abound, from compatibility to consumer behavior to price issues. With all these to overcome, it might be some time before we know whether digital products can be fully integrated into home entertainment systems, but one thing is certain for now: An awful lot of companies are hoping the future comes sooner rather than later.

Rise of the machines

Not long ago, the TV and the computer shared only a glancing similarity to each other–both had big, dark screens and needed electricity. Then the move toward digital put these two strangers on speaking terms.

Many analysts give the credit for the start of the home digital entertainment revolution to a single plain black box: the PVR, produced by companies like TiVo and ReplayTV. The device didn’t trumpet its computing résumé, but positioned itself instead as a super-smart VCR, a closer relative to the other living-room components like the CD player and the universal remote than to anything found in the tangle of peripherals in the den. It was a savvy marketing move, allowing consumers to feel comfortable with a new electronic entertainment toy rather than asking them to readjust their perceptions of computing.

Michael Gartenberg, a research director at analyst firm Jupiter, notes that PVR technology was, indeed, a good way for people to ease into bringing digital-based products closer to the television set. “You’ll find that people don’t necessarily want a great deal of computing on their TVs; they usually don’t want Word or Excel available through the remote control,” he says. “But that doesn’t mean the computer can’t take on some roles for entertainment. Look at TiVo, which doesn’t demand that you be really computer-savvy to use it. It takes computing functionality and puts it in a more familiar wrapper.”

The PVR also addresses a need, Gartenberg says. As more entertainment options, like television shows and movies, are being delivered in a digital format, the long-reigning TV is less able to bring it flawlessly into the home. Products like PVRs and HDTVs are designed to accommodate increasingly sophisticated and complex digital formats, and make it all blissfully simple for the person holding the remote.

When it was introduced, the PVR was dismissed by some as a flash-in-the-pan technology, like its predecessor, WebTV, but its endurance has given other companies hope that computing from the couch could become a reality, and soon. One notable optimist has turned out to be Hewlett-Packard, the current pack-dog leader in the field thanks to its Windows XP-powered Media Center PC. In fact, HP is so keen to push the computer that it’s partnering with retailers like Best Buy and even home builders to get the PC into as many new homes as possible.

Sean Skelley, vice president of strategic planning and business development for Best Buy, says that HP’s efforts are important because they represent the next round of tech development after PVRs. He says, “The PC is already in the living room, thanks to products like TiVo and ReplayTV, and even XBox and PS2, which are basically PC platforms. Through them, we’ve seen the evolution of the PC as it becomes interactive with TV. And there will be a continued evolution through the Media Center PC, because it’s one of the first products that’s actually designed specifically to bring PCs and entertainment together.”

With this computing foothold in the entertainment center, major software and hardware vendors are rushing in where they once feared to tread. Digital photography, video, and music are increasingly being moved from PC to TV, and the home networking industry is feeling a happy boom from consumers looking to wire their living rooms for digital fun.

However, those who think this might mean dumpsters full of old Zenith sets and mock funerals for the cathode-ray tube may be a bit too optimistic, at least for now.

Don’t kill your TV

Unlike some other technologies that have taken their own sweet time to integrate into the home but have advanced steadily (think DVD players), digital entertainment products have so far seen fairly limited adoption. On top of the usual problems that come with quick production of new technology–like how to sell it–difficulties have cropped up in terms of consumer awareness, compatibility, and competing standards, not to mention regulation and content issues. The path from the den to the living room turns out not to be so easily traversed.

Convergence advocates first have to deal with a very non-tech challenge: psychology. It’s been noted that computing is an active pursuit, with users clicking, searching, and typing. Entertainment activities, except for gaming, tend to be passive. Tom Anderson, vice president of marketing for HP, calls this the “lean forward or lean back” tendency.

“When you’re using your computer or gaming, you lean forward,” he says. “When you’re watching TV, you lean back. I’m sure the day will come when it will be commonplace to use your large screen TV to surf the Internet, but in today’s world, the living room is still a ‘lean back’ kind of place.”

Of course, in order to get consumers to change their behavior, it’s first necessary to create enough awareness around new products that they’ll be willing to try something new. Despite being embraced by gear junkies, digital entertainment options still have to come with a strong sales pitch for the general public.

Nancy Kielty, director of business development for Best Buy, says the retailer’s partnership with Microsoft, HP, and home builders was part of a larger push to get customers to see the benefits of a souped-up, digital living room. But building awareness is not as easy as throwing some ads in the Sunday paper and waiting for the mid-afternoon rush full of consumers crazy to buy entertainment PCs.

“We’ve seen really strong consumer interest,” Kielty says. “We have numerous customers coming in and asking about getting their home wired for convergence. But I think this is still one of those things that need to be demonstrated to the consumer. They have a hard time seeing the benefits until they see it. When they do realize how easy it is to implement, it’s very eye-opening for them, and they adopt it pretty quickly. But there’s still that first step to overcome, of getting them to listen.”

Mechanical glitch

Even when awareness and behavior are successfully achieved, challenges with the technology itself still have to be overcome. For one thing, there’s that fun little word–proprietary–that has given hardware and software developers such trouble in the past. In the consumer electronics world, there usually aren’t many snags with proprietary technology. You can plug your Toshiba DVD player into your Sony CD system and hook it all up through any brand of TV set. Such ease of interaction among devices is not always such a snap when computing enters the picture.

For example, Sony has a RoomLink Network Media Receiver that can stream media through the box, becoming kind of a middleman between the PC and the TV. But to make it wireless (a huge benefit, when you consider the number of wires that can clog the back of an entertainment center), the company has introduced the VAIO 802.11a wireless LAN Ethernet converter. Want the converter, but not RoomLink? Sorry, it doesn’t work that way. The device will only work with Sony’s hardware and software.

Other such examples crop up when one tries to build a digital media hub from competing companies. Any time disparate technologies are thrown together there’s always the danger of incompatibility, but trying to route these to a TV set-up can complicate the process. (Check out Nelson King’s struggles with achieving convergence nirvana.)

Tim Bajarin, president of the consulting and analyst firm Creative Strategies, notes that widespread adoption is certainly possible, if these snags in consumer awareness and technology issues can be solved. He says, “The problem is that this type of convergence is being approached from so many different angles by many different companies. As a user, you have to really want it, and know what you’re doing in setting it up. As of yet, we just don’t have a brain-dead, easy-to-install system that turns a TV and all of its related components into an Internet-connected, active system. There needs to be something like ‘digital entertainment in a box,’ and when that comes out, the boom will come.”

Homeward-bound technology

As technology devotees revel in the challenge of getting streaming video transmitted wirelessly to their HDTVs, manufacturers are working to woo their opposite numbers–those yearning for that one-box, plug-and-play digital media hub for the living room. Despite the industry’s wrangling with compatibility, it looks like the future holds more promise than pitfalls.

It appears that companies are indeed approaching convergence from many different angles, but this doesn’t seem to be so disheartening when some of the angles are so interesting. For example, Gateway recently introduced the 400L, a notebook with digital media features that has a six-in-one memory card reader. Rather than drag a PC into the living room, why not simply pick up this $999 laptop for an easy and cheap digital entertainment hub? Paul Torres, a senior product manager at Gateway, is hoping that consumers answer with, well yes, why not?

“It’s a natural evolution to move computing and entertainment together,” he says. “But you wouldn’t want a large desktop PC next to the television. Also, you can take a notebook on the go. When visiting a relative, you can hook up the digital camera, the TV, and the notebook and you’ve created a digital hub there. I think you’re going to see the portable market really going in that direction.”

HP also is working to make its Media Center PC friendlier for a less techie audience. HP’s Anderson says that the Media Center sold so much better than the company thought it would that the company did extensive research in how to make it even better, leading to the creation of the Digital Media Receiver, as well as to increased DVD and CD burning capabilities.

Meanwhile, PVR manufacturers don’t intend to be idle in the convergence wars, despite battles of their own. TiVo announced that later in the year, subscribers will be able to network their TiVos together to be used as a media server. For consumers who appreciate the ease of PVRs and need only limited hard-drive capacity, this could prove to be a boon in creating a home network.

These attempts to bring the digital and analog planets into alignment inspire some hope that the den and the living room can be joined. As soon as a few years from now, such awkwardness in bringing computing and entertainment together may only be an amusing memory. As Jupiter’s Gartenberg says, by that time “a digital entertainment hub will likely be just another component that you buy.”

Most likely to succeed

Although many companies are rushing to make computing devices that can be used from the couch, some have devices that are, simply put, much cooler than the rest. The contenders:

Alienware Area-51: For those whose convergence experience means gaming, gaming, and gaming, here’s the ultimate machine. It’s tricked out with audio subsystems, a killer graphics engine, and speakers your neighbors will hate. Added bonus: At around $3,000, it’s actually more affordable than the company’s past offerings.

Escient Convergence FireBall: This digital audio receiver is much pricier (at $2,000) than its kin, but for the feature-hungry, it may be worth the price. With a built-in CD burner and a 40GB hard drive that stores about 700 hours of MP3s, the component can also be connected to virtually any brand of TV for onscreen menu displays.

Sony’s Altair: Not yet released, but the goal is certainly ambitious. The company claims this plasma screen TV can tune in streaming video from home networks and the Internet, along with regular TV programs. It’s expected to include a Web browser, but Sony says this isn’t Web TV redone: it will be used via remote control, not keyboard.

Beyond’s Icebox FlipScreen: Why should the living room attract all the entertainment junkies? This computer mounts under a kitchen cabinet and, true to its name, can be flipped up, out of the way. It has a CD/DVD combination drive, an input jack for cable TV and an Ethernet jack for Internet access. The PC card slot means wireless is a single installation step away.

Apple’s Digital Hub: Touting what it calls the “digital lifestyle,” Apple continues to crank out a host of living room options, with new G4s and software like iLife, an all-in-one multimedia pack that manages music, digital photography, digital video, and DVD creation.

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