AOL and Intel go to the movies

The spies over at CNET have come up with a story that indicates that Time Warner Inc. (NYSE:TWX)'s AOL unit will hook up with Intel to offer a new home system that allows movies downloaded to the PC to play on the TV. Intel has been promoting its Viiv-powerd PCs as the future of home entertainment, but no one has been listening.

Oddly enough, the new Apple home system will do the same thing. The company's new iTV systems will apparently allow movie downloads to be sent wirelessly to TVs from PCs.

Convergence has been a long time coming. And, perhaps, after almost a decade of empty talk, it is becoming a reality. If so, AOL and Apple may be in the vanguard.

The PC and TV have been incompatible devices for so long, that most consumers have never even attempted to take a video download from the internet and play it on a television screen. In a population where very few people can program their own Tivos, it was simple too much to ask.

If the AOL and Apple systems work, they could actually change the way that entertainment comes into the living room. But for this to really happen, the systems will have to be both competitvely priced and easy to use. Otherwise, they will be still-born as early attempts have been.

It is not unusual that both the news on the AOL joint venture with Intel and the AppleiTV have been short on details. Critics will swarm all over systems specs that show products that need to come with a PhD. in computer sciences.

AOL may have an early lead in video downloads that work on a TV screen, but the window for convincing customers that they want such a service may prove very, very small.

Douglas McIntyre is a partner at 24/7 Wall St.