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Creating the Digital Media Hub

2 Jan, 2006 By: Kurt Indvik

The digital media hub still is a dream in most households, but the consumer electronics and PC industries are working feverishly to change that.

Industry observers may argue whether the convergent digital household will revolve around the PC or a console set-top system. But most analysts say consumers don't really care and will use any platform to create their own home entertainment ecosystem.

The full range of options will be in force during this week's Consumer Electronics Show.

So far, the PC has the edge, driven largely by some 4 million PCs in the market with Microsoft's Windows Media Center Edition (MCE) software. Consumers are storing their digital photos and downloadable music on PCs, and studies show they are somewhat comfortable with viewing movies and other video content on their PC monitors.

Still, the natural inclination is for consumers to watch their entertainment on their TVs. That's why companies like Hewlett-Packard, Sony and others are busy developing media center consoles as sleeker, more living-room-friendly machines.

At this point, they're offering a range of “replacement” systems that combine TV tuners, digital video recorders (DVRs) and DVD changers. And they're adding some PC-like functions, such as storage capacity, Web access and content management software.

Video to Transform PC Hub Model

While consumers already have embraced PCs to store and manage photos and music, “the real wild card is video,” said Michael Gartenberg, VP and research director for Jupiter Research. Consumers are used to accessing most of their video content through the TV, not the PC. They have viewed the PC as a media storage tool. But that may be changing.

A 2005 consumer study by Jupiter found 44 percent of consumers already store media on their PCs, while 32 percent are interested in recording programming from their TVs on the PC. The survey also found that 74 percent of consumers store photos on their PCs, while 52 percent store music files and 42 percent store video files. Twenty-six percent of consumers are interested in watching live or recorded TV on the PC, and 39 percent said they would be interested in watching a DVD on a PC.

Interest, though, is one thing, Gartenberg said. Actually doing it is another.

“We know there is a strong interest in this level of functionality,” he said. “The problem is that because of the technical difficulties, the number of people who are actually doing this is much, much lower than the interest level.”

Because the PC is still seen more as a productivity tool than as an entertainment center, its connection to the family TV has to be accomplished through an easy-to-install, reliable home network. This, Gartenberg maintains, is the Achilles' heel of the PC-as-media-hub scenario, since home networks capable of multimedia transmission are neither simple nor stable.

About 19 percent of online U.S. homes are networked, according to Forrester Research. Of those, about 60 percent have wireless networks more conducive to sharing access to the Web than moving digital media, especially video, from one room to another. And, according to a Forrester study, consumers without networks at this point don't seem to know why they would need one. More than half of the non-networked households see no reason to get one, and another 18 percent don't know what a network is or does.

Forrester's consumer research does show that 25 percent of consumers are interested in media and entertainment activities on their PCs, but only half of those are willing to spend more than $100 for features on a PC that enable them to do this. Forrester also found that a healthy percentage of consumers (about 15 percent) would like to be able to send photos from a PC to a TV for viewing, send video from a PC to a TV for viewing and, conversely, watch TV on a PC screen, among other applications.

But, said Ted Schadler, VP and principal analyst at Forrester, “There is no indication that consumers want to run a PC in their living rooms underneath the TV.”

Microsoft sees the game console as a portal to the living room from the PC. Its Xbox 360, tethered to a TV, is capable of networking with PCs running MCE 2005, delivering content from the PC to the TV or vice versa.

Move to the Living Room

Consumers may be more patient with a jittery PC and online connections that can sometimes go down, but “when products land in the living room, they need to be bulletproof,” said Ameer Karim, marketing director of HP's PC and digital entertainment products. His company, which has been offering a line of media PCs since 2002, is making headway with a totally different media center device for the living room.

HP's Digital Entertainment Center debuted in August 2004, looking to combine the functionality of a DVD/CD player/recorder, DVR and TV tuner, along with Internet connectivity and other PC functionality.

“The consumer at the end of the day is media agnostic,” Karim said. “I just want my entertainment or information, preferably in a single interface that I can personalize for my convenience.”

Over at Sony, the VAIO XL1 Digital Living System made its debut last November.

“The first thing we wanted to concentrate on was giving the user a centralized experience, a solid and easy way to get access to their categories of entertainment,” said Mark Hanson, VP, business development of product planning for VAIO.

The XL1 combines elements of a DVD megachanger, DVR, digital storage for music, Internet connectivity for downloads and Web surfing, TV tuner and access to Web-based information on all that content through one system.

The primary challenge for the near future, however, will be networking the PC-based and media center-based products together to distribute content back and forth.

HP's Karim, whose company plays in both camps, acknowledges there always will be both PCs and consoles.

“There is no right [entertainment] ecosystem. A home will have multiple ecosystems,” he said.

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