OR years, video on demand has been a couch potato's dream. By pushing a few buttons on the remote control, a viewer would be able to order a movie and then sit back and watch as it unfolded immediately on the screen, pausing, rewinding or fast-forwarding at will. Movie-watching would be on the schedule set by the viewer, not the broadcaster or cable company. No need even to get up from the couch to insert a tape or DVD.

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That has been the promise, and the technology to provide video on demand to television sets is well established. But the service is still very much in its infancy, and economic factors are largely to blame.

Viewers need better programming - like recent popular movies - before they will flock to video on demand. Studios need better security against video piracy before supplying their most popular movies, but quality encryption is costly and raises the price of the electronic components and set-top boxes that viewers need. And cable companies need more viewers to offset the expense of improving the technology for encryption, compression and set-top boxes.

"I've seen various business models for V.O.D. and the numbers just don't add up, so no one is doing it in a large-scale way," said Bill Rosenblatt, president of GiantSteps/MediaTechnology Strategies, a New York consulting company.

There are currently four million cable customers who use video on demand, and another three million are expected to sign up by the end of the year, said Joe Boyle, vice president for corporate communications of InDemand, a company that distributes content to cable operators. But there are about 70 million households with cable television in the United States, and analysts estimate that widespread adoption of video on demand by cable companies will take anywhere from 3 to 10 years.

If companies can make it work, the projected market for first-run movies alone is about $640 million by 2006, according to Jupiter Research. So cable companies like AT&T Broadband, Comcast, Charter Communications, Time Warner Cable, Cox Communications and Cablevision Systems are slowly testing or deploying video on demand as part of their digital cable services in some parts of the country.

Video on demand makes use of a server computer that contains video files and software to let more than one viewer have access to the video at a time. One model, the n4x made by nCube, a major provider of video-on-demand services, allows up to 53,000 viewers simultaneous access to the same movie or other video content. The video is sent by cable or fiber optic connection from the servers to a set-top box connected to the home television.

Video files are compressed to take up less space and transfer faster. Currently, video is compressed according to MPEG-2 standards, although efforts are being made to advance to the MPEG-4 standard, which can be more than 10 times as efficient.

The Internet is another conduit for video on demand, streaming delivery of television shows, music videos and other programming to home computers. (On-demand delivery to hand-held devices, as well as via satellite or airwaves, is in the more distant future.) There are a number of relatively new video-on-demand sites like Intertainer, CinemaNow and the forthcoming Movielink, an Internet video-on-demand venture from five major movie studios. But analysts say most viewers are unlikely to want to watch full-length movies on their computers or hand-helds. "Consumers are more likely to watch short-form content," said Lydia Loizides, a Jupiter Research senior analyst.

Instead of streaming, a cheaper and faster option is downloading video files to users' hard drives. But downloading also increases the potential that the file will be copied - a frightening prospect for movie studios. Video files can be encrypted, but encryption schemes can be overcome. "There is no such thing as hackproof encryption technology," Mr. Rosenblatt said. "The question is which type causes the least amount of damage once it is hacked."

Whether it is delivered to a television set, a computer or a palmtop, video on demand will depend on the quality of the content - beyond first-run movies - to be successful. The way that content is marketed will be important, too.

"Current fare is what drives traffic, so the question then becomes how to refresh old shows and movies,'' said T. S. Kelly, an analyst with Nielsen/NetRatings. "You need a middle ground between cable's airing movies in an exclusive window and the Internet's making information available anytime. There has to be significant marketing and promotion to make all this old programming an event. Otherwise it becomes just a dusty old library."