Latest High-Tech War Pits TV Against PC

Our living room is under attack.

On one side are television manufacturers with new sets that hook up to the Internet. On the other side are companies with computers that also work like a TV. Both sides want you to replace your current living room TV with their machines.

What you decide in the next few years will shape the future of home entertainment. Will your household be mostly TV or PC (personal computer)? Will you view or surf (or do something really radical, like reading)?

A year ago, Jeff Stout gave away his 25-inch living room TV and replaced it with a giant-screen PC from Gateway 2000 called the Destination. It sports a CD-ROM drive, a fast modem for hooking up to the Internet, and a huge 31-inch screen. Mr. Stout, a factory worker in Greencastle, Pa., uses it to watch TV and also to play computer games.

With such a big screen, computing can become a group activity. "I've had five people in here before and everyone was working with the computer," he says. Especially popular is entertainment software that ranges from on-screen versions of familiar board games to quiz shows.

Meanwhile, thousands of Americans, many retirees, are hooking up their current TVs to the Internet with a small box from WebTV Networks. The box allows viewers to surf cyberspace by using a TV-like remote-control. Earlier this month, software giant Microsoft Corp. announced it was buying the company for $425 million.

Some companies are marrying the two technologies. Compaq Computer, the giant computermaker, is collaborating with Thomson Consumer Electronics, maker of RCA and other TV brands, to create a new living room PC-TV. For them, the only remaining question is: Will people really want the new hybrid machines?

One reason these companies are upbeat is that TV itself is going through radical technical change. Broadcasters are moving from traditional analog to digital television, which means higher-quality pictures and better sound. To take full advantage of that technology, consumers will have to buy new large-screen sets that will probably cost $2,000 apiece. At that price, manufacturers can throw in some computer technology and still make a profit. Already, before big sales have brought the price down, Gateway sells some of its Destinations for as low as $2,999.

Many experts are less optimistic that consumers will flock to the new machines, sometimes called PC theaters. Forrester Research, a technology research firm in Cambridge, Mass., forecasts it will take until 2000 for such devices to break the 1 million mark and begin to populate America's living rooms. But those who have already tried the technology say otherwise.

Diane Crocker, a mother of two in Lake Charles, La., got a Destination 11 months ago. "It's a homework machine after school. In the evening, it's our main television set. I think it brings the family together," she says. The family has used the machine to play Monopoly and chess (the on-screen versions are much less messy than the board games), do Internet research for a school paper on spider monkeys, and create a booklet for a fund-raiser.

"It's kind of a couch potato's dream, but it's much more powerful than that," says Stacy Hand, Gateway's product marketing manager for the Destination. In its user surveys, the company found the machines were used less for television viewing (about a third of the time) and much more for computer applications such as games, Internet browsing, and electronic mail. The vast majority of users said their families' TV watching went down after buying a Destination.

Living-room entertainment that encourages less TV viewing and (potentially) more education activities? That's something many families might well say yes to.

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