The Long-Awaited Boxee Box Gets a Hollywood Preview

Few consumer electronics devices have been more widely anticipated, at least by the more geeky set, than Boxee‘s settop box for bringing Internet content to the TV–since Google TV debuted three weeks ago, anyway. The uniquely shaped Boxee Box will debut on Nov. 10 in New York, adding a potent new player to the rapidly expanding market for Internet-connected TVs and add-on devices.

Today, Boxee CEO Avner Ronen offered a preview at the Streaming Media West conference in Los Angeles, where such devices are viewed with much more wariness and even fear than in Silicon Valley. First, he offered his version of the landscape (paraphrased at times):

There is definitely hype. We’re into the 15th year of the Internet on the TV. People don’t care about the Internet on TV, they care about the content they want on the TV.

But definitely the timing is right. The Internet bandwidth getting into the home is significant. The screens people have are pretty good. People are investing in their WiFi setup. And last but not least, the content: YouTube, Hulu, etc. There’s a perfect storm brewing, though there’s a bunch of stuff that’s needed for it to completely take off.

Very much like the smartphone, that’s what’s going to happen in TV. Some of the TV-Web devices are like feature phones, only offering limited Internet access. Ronen says it will be important to establish a platform. We’re the little guy, the odd-shaped box in the horse race. We don’t think it’s winner-take-all. He places Boxee along with others offering platforms, like Google, Microsoft, and Apple.

Ronen’s (clearly biased) cut at a buyer’s guide to these devices:

If you want iTunes and Netflix and don’t care about full 1080p HD, go with Apple TV.

If you want to rent and buy videos on demand, along with some Web stuff, try Boxee, Google TV, Roku, or Microsoft’s Xbox.

If you want video on demand and all the Web video you can handle, you’re really down to two options: a Google TV device and Boxee.

If you want it all, and also have video on your computer that you want to see, really Boxee is your best friend at this point. We highly recommend it. (No kidding.)

OK, so what are the obstacles? The mass market is not going to go out and buy Boxee boxes, or Google TV, or Apple TV. We have to be realistic about it. The seven-year-plus TV replacement cycle will be the key. You probably have a decade before everyone has it. But if you’re in the TV business, you need to start freaking out now. (And they are.)

The challenges: First is home networking–it’s just not very easy, especially if some problem arises. That maybe is the biggest issue. Then there’s the availability of content. But today, there’s no parity between what you can get on your cable settop and what you can get on the Internet. Hopefully this is a short-term challenge. The ability of consumers to have more engagement with your content should be great for the industry. We think this will take awhile to get resolved. But content owners will put out stuff where they’re confident of the business model–say, $10 for a set of premium content. We’ll see much more pay walls. I hope in 2011 there will be a breakthrough on the content front. There is reason to be optimistic in the longer term.

Then came a demo from Marketing VP Andrew Kippen. He says Boxee is very much a software company, so it has licensed its software to D-Link, the manufacturer of the boxes. More boxes will come next year, in Blu-ray and other devices. It will sell for $199.99. It is based on the same Intel Atom chip as Google TV. You can plug an external hard drive into the box and access that drive from other computers on the network–essentially network-attached storage. You can also plug in a dongle and use an external remote on the box.

There are several different ways to pull in Internet content. Seeing usage of four to five TV shows a week, one or two movies a week. Usage is two-thirds Internet content, one-third TV content. We’re up to 1,600 different shows available on the Web, about 40,000 episodes. We want to take away the effort to find things. So there’s a TV Show Library showing screenshots of the shows.

If it’s not mainstream TV you want, more like regular Web content, there’s an Apps Library, like Funny or Die, TED Talks, Revision3, Flickr, Clicker, and many others (a lot of them familiar from other boxes such as Roku and Google TV).

We also have a full Web browser that we’re still working on.

There’s also a My Movies library, with similar screenshots, and clicking on them will play trailers. And My Music and My Photos libraries drawn from people’s personal collections.

Boxee is emphasizing the social elements of the box as well. You can see what people are sharing on Twitter and Facebook. On the left side of the screen, you have a feed generated from your Twitter and Facebook accounts, and add recommendations to your viewing queue. In the middle column are recommendations from Boxee. And on the right side is your queue, the stuff you save to watch later.

We definitely want to work with content providers to help them get their content out there.

A few questions from the audience:

Q: Can you get to illegal pirate sites? And how does the browsing work without a keyboard? Ronen: We never link to pirate sources. We want to keep it as friendly to content owners as possible. In terms of the browser, the remote has a directional pad to move the cursor, but there’s also a qwerty keyboard on the back. Onscreen keyboards suck. Wherever you are in the user interface, if you start typing, it starts a search.

Q: What about DRM for high-value content? Ronen: We support Windows DRM, another one I didn’t catch, and will support Vudu DRM.

Q: Netflix? Ronen: Official response: Netflix is a partner of Boxee for the past two years, and we hope to have the same partners on the box that we have on the software. You’ll have to wait until next week (to find out).

Q: In a multiuser household, how does the personalization work? Ronen: It’s a bit flawed, but each person in the house can have an account. There’s an issue with that, because the TV is inherently a social device.

Q: What about the broadcasters’ blocks on Google TV? Ronen: It’s very unfortunate. Just offer me an option to pay for it. People should pay for content, whether it’s through subscriptions or a onetime fee or ads. But the business model should be consistent so you can view it across screens. To have a per-device policy seems not scalable to me.

Q: How do you like Hulu Plus remotely? Ronen: The issue for me is I’m paying for access to a particular device. It would be much easier for me to pay $10 to get access to not only the last four episodes but all the seasons.

Ronen mentions he would prefer a $99 price but “Intel is expensive.”

Q: Any advertising? Ronen: There’s a big opportunity, it’s a big screen with a lot of space and consumer engagement. But we haven’t gotten to it yet. We expect to allow people to put in their credit card to buy an show, an app, a game, whatever.

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