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To: kemble s. matter who wrote (125309)	5/16/1999 11:20:00 PM
From: Patrick E.McDaniel	Read Replies (1) \| Respond to of 176387

Kemble, Dell is in this story. Software Turns PC Into Digital VCR (05/14/99, 8:36 p.m. ET) By Malcolm Maclachlan, TechWeb MGI Software said it is hoping to make a lot of consumer-electronics companies very unhappy. On Thursday at the Electronic Entertainment Expo '99 in Los Angeles, the Canadian company introduced new software that can turn Pentium III PCs into all-in-one home entertainment systems. Pure DIVA, short for Digital Interactive Video and Audio, plays both CDs and DVDs. However, its most compelling feature is the ability to digitally record video. Users will be able to record directly from television, cable systems, or VCRs. The software features Time Shift capabilities. For instance, if the user is interrupted while watching a show, they can hit "pause" to start recording the parts they will miss. The software can also be programmed to record shows like a standard VCR. Users can watch material that is recorded or live, watch video in slow motion, or zoom in on a part of the image. "I can zoom in eight times and see if the guy's foot was out of bounds like the referee called it," said MGI spokesman Shelly Sofer. This mimics the function of two high-priced television set-top boxes, each introduced late March. Replay's ReplayTV box starts at $699 and holds six hours of programming. TiVo's set-top box costs $499 for the base version and holds eight hours. Much of the size and costs of these devices consists of hard drive space. The DIVA software will also place heavy demands on users hardware. The software requires a 500-MHz Pentium III, with 128 MBs of RAM and an AGP video card. Sofer said that one hour of digital video will take up about 3 GBs of hard drive space. However, the company is banking on consumer's reluctance to adopt new hardware. It is hoping to market the software directly to PC makers, who would then bundle it and begin delivering it on PCs by the fall. Softer said MGI was in talks with all the major PC makers. Sean Kaldor, an analyst with International Data Corp., said that companies like Replay and TiVo must overcome consumers' reluctance to buy expensive, new items of consumer electronics. But MGI faces a different problem, he said, that of getting people to think of their PC as the main place they store video. "I kind of question that on the PC," Kaldor said. "I understand the use on the TV. But am I going to pause what I'm watching to do e-mail." MGI's Sofer said the company is counting on users being able to hook their PCs up to more traditional entertainment devices, such as stereos and large screen television. The ability to do such interfaces is standard on new PCs now, he said. Given the falling prices of PCs, MGI is hoping to convince consumers that the computer is the ultimate home entertainment device. Softer said he could not discuss how much the software might add to the cost of a PC, but said it would be far less than it would cost to buy all the same capability in traditional consumer electronics. Very powerful systems are coming into the price range of many more consumers, he said. For instance, Dell's entry-level 500-MHz PC now starts at under $2,000. The company is partly owned by Intel, which invested $2.8 million for a five percent stake in September of 1997. This relationship gave MGI early access to Intel's plans for the Pentium III chips, Sofer said.