New York/Las Vegas, Jan. 7 (Reuters): Media companies and celebrities stole the show at the annual consumer convention this week.

Actors Tom Cruise, Tom Hanks and pop star Justin Timberlake rubbed shoulders with the top executives from Yahoo, Sony and Microsoft.

Their appearances matched a litany of deals by Time Warner’s AOL, General Electric’s NBC Universal, Viacom’s MTV at the Las Vegas convention, where media companies were once sidelined.

Media companies have “always been observers in Las Vegas,” said Leo Hindery, managing partner of InterMedia Partners, a private equity firm specialising in media, and former CEO of cable operator AT&T Broadband, referring to programmers’ outside status at the gadget show.

This year, media’s “credentials are just as important as Google’s and the guys who make the devices,” Hindery added.

The groundswell of activity is a response to the fragmentation of consumer viewing habits and the proliferation of high-speed Internet access, now in over 60 per cent of US homes, by some measure, top media executives have said.

Media, once ensconced in the living room, is now cropping up in cars, the gym, the commute to work and just about any nook where viewers can slip out a cell phone or portable media player, analysts have said.

Programmers have wearily eyed the impact of not meeting consumer demand for flexibility about when and what to watch, while juggling concerns over piracy.

Consider what happened to the music industry, which dragged its heels for years before offering legal alternatives online. US music album sales slid 7 per cent this year compared to 2004, to an eight-year low, according to Nielsen SoundScan data.

Sony Corp.’s chief executive Sir Howard Stringer summed up the tension. “Content and technology are strange bedfellows. We are joined together.”

Few companies know better the disastrous effect of failing to balance entertainment and technology.

Sony owns a movie studio, is an investor in a music joint venture, and controls an empire of electronics, computer and video games companies.

But it has been criticised for ceding the portable music market that it forged with the ubiquitous Walkman to Apple Computer Inc.’s iPod.

On Thursday, Stringer presented a reformed Sony. Earlier, during his presentation, he clutched the new Walkman, now built into the Sony Ericsson cell phone.

Cruise joined Yahoo Inc. CEO Terry Semel to demonstrate the company’s new services that link its Web products to TVs and phones. “I am very excited about technology, obviously,” Cruise said.