Digital Content Next Big Thing for PCs

NEW YORK – Sleek hardware, such as Apple Computer Inc.'s new iMac G5 and video iPod, Hewlett-Packard Co.'s Digital Entertainment Centers and slim Pavilion 7210n, and even Microsoft Corp.'s Xbox 360 — a hit among young and old who crowded the Microsoft booth on the first afternoon of the DigitalLife show, a three-day consumer technology and entertainment exposition here — all offer looks, prices and computing power to woo consumers this holiday season.

Those systems, all of which were shown on the opening day of DigitalLife, emphasized sleek design and aggressive prices. DigitalLife is being produced by Ziff Davis Media, the parent company of Ziff Davis Internet.

But where price and design remain key factors in new products' successes, the battle for the hearts, minds and wallets of today's consumers is increasingly being waged with content.

HP's latest Digital Entertainment Center z556, for example, will sell for $1,499 with twin high-definition tuners, a price that Ameer Karim, product marketing manager for HP's consumer PCs and DEC products, said competitors will find difficult to match. Meanwhile, the Xbox 360, which will hit the market on Nov. 22, will start at between $299 and $399.

Apple, which has made a name for itself in music with the iPod, has coupled its new iMac G5, which starts at $1,299, with a new application dubbed Front Row. Front Row allows the iMac, announced last Wednesday, to more easily access, find and manage multimedia, including online content, such as music videos and ABC television programs. The company's new video-capable iPod, which starts at $299, can play many of the same files.

Just about any consumer can access music videos from Fat Boy Slim (search) or Kanye West (search) via Apple's iTunes Music Store, which works on both the Mac and PC. But only those who purchase a new iMac G5 will gain Front Row, whose special, remote-control-driven interface is designed to make accessing iTunes music, DVD videos, photos and other multimedia simpler.

Experts predict that consumers will begin to consider the types of content available and the ability to manage them more carefully before they pony up for a new machine.

The decision to buy an Xbox 360, for example, might seem fairly cut and dry. The availability of popular game titles is typically the main driver of interest in any game console. However, Microsoft has equipped the new Xbox with the ability to access content, including videos, shows and even news from MTV, thanks to a built-in Media Center Extender. The extender software links the console to a PC based on the company's latest Windows XP Media Center Edition software, announced Friday.

PCs based on the latest version of the Media Center software can now access a wide range of online content, including MTV Overdrive, the company's online channel. Several others, including the Discovery Channel, FOX Sports and MovieLink LLC, are also offering previews, downloads and other content for the new Media Centers via the Media Center Start page's Online Spotlight menu.

Peter Moore, vice president of worldwide marketing and publishing for Microsoft's Home and Entertainment Division, showed off the new Media Center feature during his Xbox 360-focused keynote on Friday morning.

Consumers are impressed by the expanded multimedia features of Microsoft's upcoming Xbox 360. Click here to read more.

Christened Update Rollup 2, the software will be preloaded on many machines—including the least expensive desktop Media Center models, which sell for as little as $599 and come without TV tuners or high-end graphics—to tap the new content-oriented features. Existing Media Center owners can download the update via Microsoft's online Windows Update tool.

That content, whether games or MTV programs, could make or break future decisions, according to some younger consumers who attended DigitalLife.

"With the multimedia apps, Xbox 360 is much better than anything I've seen before," said show attendee Kendal Roberts, 17, in an interview near the Microsoft booth on Friday.

Although he's likely to buy both the latest Xbox and the forthcoming PlayStation 3 from Sony, "It's the combination of better graphics, new games and these multimedia add-ons that make the [Xbox] stuff pretty cool," Roberts said.

The Xbox 360 must be used in combination with a Media Center PC to access the content, however.

PC makers and Microsoft will use many methods to lure enthusiasts with content.

The latest Media Center update also includes a better way to organize large DVD collections. It allows Media Center PCs to connect to 200-disc DVD changers, which will hit the market this fall. The Media Center software includes a graphical interface that shows the cover art for each DVD in the changer, as well as a description of each movie.

"Our research has shown that the enthusiasts in this category have about 100 DVD movies. Now they don't have to fiddle around with [DVD] books they need to open up to find DVD discs," Karim said. "Now they can load up their entire collection."

HP is including two custom features within its Media Center PCs. One will allow people to view the games they have loaded on their machine, while another will provide a special link to iTunes software. HP preloads iTunes on its Pavilion consumer PCs.

"We feel that this product is now primed for the living room, and we're taking a chance in being possibly more aggressive than we need to" by offering it at $1,499, Karim said. But "I'm all about mass adoption of these devices and not just keeping them for wealthy and affluent people."

Don MacDonald, general manager of Intel Corp.'s Digital Home Group, even signaled a growing emphasis on content from the chip maker.

MacDonald, who gave the opening keynote at DigitalLife on Friday, said Intel wants to make Viiv, it's a forthcoming consumer PC hardware platform, the basis for distributing a wide range of content, not only to PCs, but throughout the home.

During his keynote, the Intel executive demonstrated a PC running Intel's Viiv media server, software that translates multimedia file formats so they can be shared between devices. The demonstration morphed an AVI format movie (search), recorded on a handheld video camera, into a video stream that could be viewed on a television designed for MPEG-2 files (search).

Later, in an interview with Ziff Davis Internet, MacDonald said Intel sees offering content as just one more way for computer makers to compete.

And "competition will drive the [content-rich] world we're looking for," MacDonald said.

Editor's Note: Matt Hines contributed to this story.