WHAT'S OLD IS NEW AGAIN NET QUALITY GETTING BETTER FOR VINTAGE CINEMA LIBRARY.

Byline: Jesse Hiestand Staff Writer

By putting 375 movies, short films and TV episodes on the Internet for instant viewing, a group of Hollywood outsiders has already succeeded where Steven Spielberg, David Geffen and their deep-pocketed friends have failed.

But CinemaPop.com, based in Los Angeles, still faces the same challenges that led Spielberg and his DreamWorks SKG partners to pull the plug on their Internet entertainment site last week - before it even debuted.

For most Internet users, video over the Internet is still blurry - even at its best, when it fills just a quarter of the screen - and the selection of titles is limited enough to keep them going to video stores for rentals.

For now at least.

``When we saw the number of people who could be reached by the Internet, it occurred to me that this had the potential to replace home video as the No. 1 source of revenue for the movie industry,'' said Alex Kanakaris, chief executive of CinemaPop.com's parent company, Kanakaris Wireless. ``I also knew enough about technology to know it would evolve.''

By and large, improved software and high speed Internet connections have made it possible to view high-quality video over the computer - at any time and from anywhere in the world.

Yet this niche of the Internet has seen some notable failures in recent months.

The much-hyped Digital Entertainment Network went out of business. Shockwave.com spent millions to tap top Hollywood talent for original programming, only to announce last week that it was laying off staff and shifting focus to interactive gaming.

And Pop.com no longer wanted to struggle in what its founders called a less viable market.

That has led analysts to take a dim view of Web companies that simply distribute content like pictures, words or images, while drawing revenue from on-site advertising.

``The problem is we're not quite ready for that type of product to be consumed by millions of people,'' said Vernon Keenan, an Internet analyst with Keenan Vision Inc. in San Francisco.

Charging people for such fare can be equally difficult since most Web users are used to getting what they want for free.

``People do not do content subscriptions on the Internet with two exceptions: the Wall Street Journal and porno sites,'' Keenan said.

Kanakaris hopes a combination of subscriptions, fees and advertising on his site will prove successful.

For the past few years, Kanakaris and his employees, including a former video rental chain owner and engineer who developed a command and control system for the National Aeronautics and Space Administration, have been focusing on simply getting video out on the Web.

In 1995, Kanakaris put ``The Perfect Gift,'' a B movie, online. Because of the extremely slow connections then, the average viewer saw images that streamed onto the screen at about the size of a postage stamp, when they appeared at all.

The technical challenges were so daunting that Kanakaris largely switched to finding ways to distribute books online, which is far easier through regular, dial-up connections.

Now that it is possible to get quality video images out, the focus for Kanakaris and others has been on finding an audience.

Most of CinemaPop.com's films - none of them recent blockbusters, many decades old - are free to watch. Some require a $5 per monthly membership for unlimited viewing, and a handful of the films are pay-per-view.

Viewers can also select a video feed that is optimized for the speed of their connection, from 56K modems to high-speed corporate T1 lines.

In an Internet niche that has seen some spectacular failures in recent months, Kanakaris is also hoping to stay a step ahead of the competition by optimizing the movies available on his site for viewing on small, hand-held computers, even those that are wireless.

``We're going to the next step, having succeeded at what some of Hollywood's big boys have failed at,'' he said.

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(1 -- 7) Persevering in a niche many have fled, CinemaPop.com is looking for an Internet audience for quality video images of its 375 movies, short films and TV episodes.