Technology researcher Michael Cai saw the promise of media convergence firsthand more than two years ago, when a friend treated him to a home viewing of the hit movie "Harry Potter and the Sorcerer's Stone."

"The film was pirated off the Internet and broadcast from a PC to a big-screen TV using wireless technology from X10," the Parks Associates senior analyst laughed, referring to the maker of tiny wireless video cameras whose pop-up ads once blanketed the Web. "It worked pretty well."

As 2004 comes to a close, the world is at once very different and much the same for video enthusiasts wanting to take movies from the Internet, store them on their PCs and shoot them over to giant TV screens. What's new is the growing list of devices coming out that can connect the two worlds, either wirelessly or with cables. But one thing that hasn't changed, Cai said, is the dearth of high-quality legally available content that would justify the investment for most people.

"The idea of the digital-media adapter has been around for years through devices like Sony's RoomLink, but they never really took off," Cai explained. "One problem has been a lack of consumer awareness. But the bigger problem is the lack of content--not self-created content like home movies, but premium content, meaning first-run Hollywood movies."

Efforts to make more legal content available are underway, but it will be awhile before they catch up with the hardware.

Prices for home networking gear such as wireless routers dropped in 2004, and consumers reacted by opening their wallets. But consumers are still mainly using the networking products to share broadband connections.

Making it easy and worthwhile to play and stream multimedia content will add a whole new dimension to the consumer electronics world and boost the industry's transition to digital content. While the overall list of devices promising to allow consumers to stream multimedia is growing, sales have been lackluster to date, according to the Consumer Electronics Association (CEA) trade group.

"I don't think we even track it," CEA spokesman Sean Wargo said. "The category is too new."

Disappointing sales aren't for a lack of trying. The consumer electronics industry first began taking a serious run at the market in early 2002, when chipmaker Intel developed a reference design for a media adapter and offered it to manufacturers. There was only limited interest at the time, but more recently, some big PC manufacturers, including Hewlett-Packard and Gateway, and wireless router makers, such as Linksys, NetGear and D-Link, have released media adapters that wirelessly connect PCs to TVs using various versions of the Wi-Fi standard.

In addition, several high-end DVD players have come out under little-known brands--GoVideo, Amoi, KISS--with Ethernet and Wi-Fi-enabled media adapters that allow TVs to access computer files such as photos, MP3s and most major video formats.

Look for the DivX label
KISS, a high-end Dutch audio-video components maker, began producing an Ethernet-enabled DVD player two years ago, and now offers several models ranging from about $250 to $400. These devices, which support the underground DivX file format, could hold special appeal to Net video aficionados who have turned to peer-to-peer networks such as BitTorrent and eDonkey to stockpile large DivX video libraries.

DivX Networks is working hard to transform itself into a legitimate digital-media technology provider and has struck deals with most major DVD chipmakers to support its video technology, which compresses bulky files, making them more efficient to download over the Net. The company claims consumers have created billions of DivX-encoded files, many of which are available online, with or without the permission of copyright holders. Major brands such as JVC, Panasonic and JVC now sell DivX-compatible DVD players, though some support only DivX DVD playback capabilities and do not offer Ethernet or WiFi options.

Others are moving ahead with multimedia adapters that support video formats that are standard in the industry, but less widely used on peer-to-peer networks, such as MPEG-1, MPEG-2, MPEG-4 and Windows Media Video-9.

Just this month, Netgear released a $220 Wireless Digital Media Player (MP115) that streams digital media content wirelessly from the PC or the Internet to both TVs and stereos. The device comes about a year after Netgear introduced a music-only networked player for about $149.

Also targeting the video market is Linksys, which announced its DVD Player with Wireless-G Media Link in January 2004, along with a music-only networked player.

Given the slow uptake for these devices, Cai said they may wind up being bypassed by next-generation convergence devices that bundle broadband directly into the TV set. Some of those devices are now available, including a flat-screen TV from Sony code-named Altair.

Personal video recorders (PVRs) with direct hookups to broadband modems could also short-circuit the need for expensive networked DVD players or stand-alone digital-media adapters. TiVo, for example, has announced plans to create a video download service in partnership with Netflix.

Wireless video: Still workin' out the kinks
Connecting a PC to the TV with cables can be a hassle, but consumers should be wary of manufacturers' claims concerning wireless video streaming over Wi-Fi.

"The Wi-Fi standard does not include any provision for quality of service," Cai said. "That can lead to some problems whenever bandwidth fluctuates."

Video quality on a network promises to be improved with a new wireless specification for Wi-Fi, called 802.11e, that aims to ensure that video streams are not interrupted.

Netgear spokesman Doug Hagan said that while video quality can be a concern, wireless routers are improving on this front. New standards in the wings, such as 802.11n, should address service and bandwidth concerns, he said, with products expected as early as late 2005 in advance of actual standards ratification.

The 802.11n standard is in the process of being finalized. Once complete, it will allow data to be wirelessly transmitted around 100 mbps. Proposals for the 802.11n standard are being considered by the Institute of Electrical and Electronic Engineers, which makes determinations on standards, and won't be completed for up to three years.

In the meantime, companies such as Netgear are reviving the largely overlooked 802.11a standard to help alleviate video quality issues, he said.

"'A' has popped up as another alternative as we wait for 'n,'" he said.

The 802.11a standard is less susceptible to interference than the 802.11g and 802.11b standards, which use the same radio frequencies as microwaves and some cordless phones, and can use more channels to send and receive data, making it less likely that a video stream will be interrupted.

Other efforts to connect consumer electronics and computing devices are also in the works. The Universal Plug and Play specification, developed by members of the UPnP Forum, allows different devices to interoperate--playing the same files on different types of devices. The forum consists of 500 member companies, including Microsoft, Philips, Sony, Intel, IBM and Hewlett-Packard. The companies help promote the specification, and they work on its development so that new devices can use it.

The goal of the UPnP Forum is to keep that growth going by helping to connect new and existing devices within the home and make them easy to use.

"Making multimedia easy to play is hard, and many of the parts needed to make it easy are not in place," said Stephen Baker, an analyst with NPD Techworld. "Playing video has not progressed nearly as much as music."

The convergence world is considerably less friendly to consumers who want to use legally purchased video than it is to those trying to make use of their music. The audiophile's audio file option have taken off, thanks to offerings such as Apple Computer's iTunes Music Store, the newly launched Napster service and RealNetwork's online music store and Rhapsody subscription service.

A number of devices have come out to stream tunes from a PC to a home stereo, such as Apple's AirPort Express wireless router and the Roku Soundbridge.

Several video download stores now exist online, including MovieLink and CinemaNow, offering Web surfers a small collection of movies for rental and purchase. The pickings are generally slim, however, putting a $400 DVD purchase on the extravagant side.

Analysts said more content is coming, thanks to the efforts of the Digital Living Network Association (DLNA), an industry group negotiating licensing and technology issues with Hollywood. Cai said the DLNA is expected to make some major announcements by next year that could open up more content and make PC-TV convergence more appealing for average consumers.

Baker agreed that 2005 could shape up as a make-or-break year for Hollywood and electronics manufacturers hoping to cement consumer demand for home networked gear.

"If you've got a digital-entertainment strategy," Baker said, "this year has to be the year you execute on it."

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