In recent years, there's been a lot of talk about the convergence of the Internet and the living room. Are Internet-based video options enough to make people cut the cord and ditch cable TV for the Web?
New York-based Boxee is hoping the answer is yes. The 45-person team last year introduced the Boxee Box, a standalone device developed with D-Link that lets users stream a variety of Web content, like Netflix and Vudu, right to the TV. Next year, the company will expand to live TV with a dongle that can access over-the-air channels like NBC and Fox.
But are people ready to drop cable for good? Is there enough to watch on the Web? And is the average consumer even aware that options like Boxee exist? We sat down with Boxee CEO Avner Ronen recently to find out.
PCMag: How did Boxee get started?
Boxee: We started in New York 4.5 years ago, and the goal was to create a different and better experience for people to watch their favorite stuff on TV, coming not from their set-top box, but from the Internet. We developed the user experience and platform that enables users to get their favorite movies and shows and video clips from the Internet onto their TV. At the end of 2010, we launched a device—the Boxee Box with D-Link. Until then, the software was available for download, but you had to connect your computer to the TV; a very geeky setup. With the Boxee Box, we were still a software provider, [but D-Link provided] the hardware to support it, and it became a much more approachable, mass market product. You can buy it like you're buying a Blu-ray player, connect it to your TV and start watching movies and shows.
Recently, we announced that in January we're bringing out Boxee TV, an add-on for the Box, which enables people not just to get their favorite TV shows from the Web, but also get the live broadcast—ABC, CBS, NBC, and Fox. And we feel like, for the first time, that combination can provide a real alternative to cable TV for people. Looking forward, what we're going to try and do is deliver that promise to people—to be a way for them to cut the cord.
PCMag: What's the benefit?
Boxee: Rather than pay $80 per month for cable TV, and pay a lot of money for stuff they don't watch, [Boxee TV is] a different setup, where they have much more control over what they pay for. We think it's very similar to the transition that happened in the music business. Historically, you had a couple of songs that you really like, but you still buy the whole album. As music became digital, users revolted against that type of bundling, and I think the same is happening with video. We don't think [Boxee TV] is necessarily for 100 percent of households, but I think for a good numbers of Americans, it could be a real alternative.
PCMag: And cable companies haven't really embraced the a la carte option.
Boxee: I think the [cable] industry is this huge, existing eco-system, like every other eco-system, that resists change. But I think if you look at the technology, and more importantly, you look at consumer behavior, the train has left the station. It's very clear where it's headed. And I'm not saying that bundling is going to disappear; it's going to remain. I just think there are going to be viable alternative methods for people to get video.
PCMag: What type of consumer will pick up Boxee TV?
Boxee: I think when we're looking at the user, from the demographic standpoint, we're probably talking the 25 to 45 range. But I think more important than demographics is behavior and if you're watching Netflix or Hulu or iTunes … most of your watching is on the Web, and you're really only tuning in to TV when you want to watch something live, like sports, the Oscars, or a reality TV show. If you're watching more and more on your laptop or your iPad, then I think you'd [like] what Boxee is doing. If you're coming home and you're watching TV for six hours and you watch a lot of ESPN, we're probably not the right solution for you.
But the thing is, there's a big enough number of people who really changed the way they consume TV over the past couple of years. For others, I think, they've made changes, but they don't necessarily realize how much of what they watch is available free over the air or over the top.
PCMag: At this point, Boxee TV will only be available in the U.S. and Canada?
Boxee: Yes, that's the focus of the company, mainly since we've started. We know this market better than any other market. It's a big enough opportunity here. Before we spread ourselves to additional companies in terms focus, we're going to try to get the U.S. and Canada here.
PCMag: How long as Boxee TV been in the works?
Boxee: Probably since March we've been working on it. We've been thinking about it for a long time, but we first really wanted to get over the top right, and we think we've done a good job there. There's a lot of content now for users, different ways for them to discover the content. We integrate social really nice. But then we're talking about users, the big missing thing was live TV, watching the big game, the big event, watching news, those were missing things and those were things that were not in our control to get to the users because they're not available over the top.
PCMag: Are there any technical challenges with something like Boxee TV?
Boxee: I don't think it's rocket science. The challenge is more making users aware that the software is available and just making them think, even if it's for a couple of minutes, about what they actually watch on TV. I think for many … they're paying $80 for very few shows and hopefully many of those people will say, I'm ready to cut the cord.
Continue Reading: Boxee Box, One Year Later>
PCMag: November marked the one-year anniversary of the Boxee Box. What have you learned?
Boxee: People are much more passionate about it than they are with the software. Some of it has to do with the fact that they bought it for $180 rather than just downloaded something for free. But it's not just that they're more passionate; they're using it much more. People who bought the Boxee Box are using it several times a week, two-hour sessions. It's pretty heavy use.
We also realized that being in retail is a different story. We go all the time to stores; the sales people many times don't know the differences between the different products in the category, what the product does, so it's a challenge to not only reach consumers but also educate the retailers on how to sell the products.
PCMag: What type of content is most popular?
Boxee: Movies and shows are what most of the time is spent on. People watch a lot of shorter video clips, mostly from their friends—if someone shared something on Facebook or Twitter. In terms of time spent, it's movies and video; Netflix is number one on the movie side.
But we're kind of surprised at the amount of usage that the music services get on Boxee, whether it's Pandora or Spotify or Grooveshark. It's all getting a lot of usage; I guess because people have it in their living room, it's connected to a surround system, so it's a great way to get music in the home.
PCMag: Getting Hulu on Boxee Box has been somewhat of a trial. What's the status with that?
Boxee: It's taking us too long to bring it; we hope we can make it happen sooner or later. I think both sides will make it happen, it's just a matter of priorities.
PCMag: You recently launched an iPad app. What type of reaction have you received on that?
Boxee: We have many people using it with the Boxee Box. If you discover something on the iPad, then watch it on the Box. We have a good number of users who just use the iPad. The most popular features are "watch later," where you can bookmark videos across the Web and watch them on your Box or iPad, and being able to see what your friends are watching on Facebook and Twitter. Those two features are driving the most usage, and that's more user-generated content than movies and shows.
PCMag: Are you looking to expand to other platforms like Android?
Boxee: We're thinking about other platforms, but the iPad kind of dominates the tablet market so there's no really compelling reason for us to do Android tablets. Maybe if the Kindle Fire really does as well as people expect and it becomes an interesting platform, but otherwise, not right now. But we'll probably make it sooner or later.
PCMag: If someone has never heard of Boxee, how do you sell the product?
Boxee: Today most people who pick up Boxee are those who research the category. If you're uninitiated to this space and you're just going to the store, it's very hard to get somebody to pick your product just based on the package. So, what we would tell people is, if you're looking for a cheap way to get Netflix, Roku is a great solution. If you have a big iTunes movie library that you accumulated, Apple TV is a great solution. If you're looking to cut the cord and stop spending so much on cable, Boxee is your best solution. If you want to do more than just Netflix, you want to the greatest variety of apps and content, then Boxee would be a great option. And, if you have a lot of personal media that you have on hard drives, computers, etc, Boxee would be the champ in dealing with those.
PCMag: What about Google TV?
Boxee: If you really want to browse on the TV, I think it's a great browser on the TV. But I don't think that's something many users are looking to do. I think it's better served on a laptop or iPad. I think TV is still about watching video and making experiences as seamless as possible. I don't think the experience of watching a video and then spending 10 minutes searching and browsing to find the next video to watch [is] a great experience. I think it still needs to be something that's very simple and very fluid for users. Switching between the stuff you watch is easy as up/down on the remote and you don't have to invest a lot of time between videos. I think it will remain a video-centric experience, the TV.
PCMag: Boxee is one of a handful of successful startups in New York's "Silicon Alley." What's the appeal of the city?
Boxee: I feel like it's a great time for startups in New York. There's a lot going on … Gilt is an amazing company, Foursquare has done really well, Tumblr is amazing and also Etsy. Talent is an issue, but I think it's an issue almost everywhere right now. This is a personal preference, but I love the fact that if we go down to grab something to eat, ordering coffee, we're not surrounded by other Internet startups all the time. Every time I'm in the Valley, it's a bit weird that everybody around you is in the same kind of business. Too homogenous in my opinion.
PCMag: What's next for Boxee?
Boxee: I hope that from a product perspective, we can take what we've initially done and extend it; make it more seamless to switch between live TV feeds and over the top content. And I hope we can make our product more mass market friendly in terms of user experience. And from a grand perspective, I hope we can solidify Boxee as very clear alternative to traditional pay TV.