Cutting the (Video) Cord: Boxee

by on January 18, 2009 · 5 comments

This ongoing series has explored the increasing ability of consumers to ”cut the cord” to traditional video distributors (cable, satellite, etc.) and instead receive a mix of “television” programming and other forms of video programming over the Internet.  As I’ve argued, this change not only means lower monthly bills for those “early adopter” consumers who actually do “cut the cord”, but, in the coming years, a total revolution in the traditional system of content creation and distribution on which the FCC’s existing media regulatory regime is premised.   

This revolution has two key parts:

  1. Conduits: The growing inventory—and  popularity—of sites such as Hulu, Amazon Unboxed and the XBox 360 Marketplace (or software such as Apple’s iTunes store), that allow users to view or download video content.  Drawing an analogy to the FCC’s term “Multichannel Video Programming Distibutor” or MVPD (cable, direct broadcast satellite, telco fiber, etc.), I’ve dubbed these sites “Internet Video Programming Distributors” or IVPDs.
  2. Interface:  The hardware and software that allows users to display that content easily on a device of their choice, especially their home televisions.

While much of the conversation about “interface” has focused on special hardware that brings IVPD content to televisions through set-top boxes such as the Roku box or game consoles like the XBox 360, at least one company is making waves with a software solution.  From the NYT:

Boxee bills its software as a simple way to access multiple Internet video and music sites, and to bring them to a large monitor or television that one might be watching from a sofa across the room.

Some of Boxee’s fans also think it is much more: a way to euthanize that costly $100-a-month cable or satellite connection.

“Boxee has allowed me to replace cable with no remorse,” said Jef Holbrook, a 27-year-old actor in Columbus, Ga., who recently downloaded the Boxee software to the $600 Mac Mini he has connected to his television. “Most people my age would like to just pay for the channels they want, but cable refuses to give us that option. Services like Boxee, that allow users choice, are the future of television.” ….

Boxee gives users a single interface to access all the photos, video and music on their hard drives, along with a wide range of television shows, movies and songs from sites like Hulu,NetflixYouTubeCNN.com and CBS.com.

With 200,000 users thus far, Boxee is quickly taking off and made a big splash at CES this year.  Boxee may be a scrappy start-up but is founder realizes the revolutionary implications of his product:

Mr. Ronen also shared what he called his “politically incorrect” vision of how the Internet would upset the television business by giving people on-demand access to the array of Web content.

“The challenge for the cable industry is how they grapple with the fact that this is in some way a substitution for some of the things they do,” he said.

The NYT rightly observes that, whether Boxee really takes off as the Next Big Thing, its success thus far is at least driving other “consumer electronics companies to move faster to bring the Internet to their devices.”  I suspect that what we’re seeing now is a “tipping point” on both sides of the business:  As IVPDs gain popularity and larger inventories, “interface” developers like Boxee (or others on the hardware side) will proliferate rapidly.

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