Web on TV, Generates Buzz

Piping Internet video into a television seems as if it should be simple — after all, a screen is a screen. But consumer electronics and media companies have been moving toward that combination with painstaking caution, both because of technical limitations and to protect their existing business models.

Now, with an Internet start-up’s hubris and whimsical name, an 11-employee New York company called Boxee is barging into the fray. It is treading over the carefully negotiated business arrangements of much larger companies and garnering accolades from tech-heads for doing what the big guys have failed to do.

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.”

The software, which is free and available for download at www.boxee.tv, works on Mac and Linux computers, and on Apple’s set-top box, Apple TV. A version of Boxee for Windows PCs is being tested among a limited group of users.

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, Netflix, YouTube, CNN.com and CBS.com.

Unlike the increasingly long and convoluted channel directories on most cable and satellite systems, Boxee offers a well-organized directory, which can be navigated using the remote controls that now ship with most computers.

The most ardent Boxee fanatics — almost all of its 200,000 early adopters seem to have turned into online evangelists for the company — then connect their computers to their living room televisions.

The buzz around Boxee is creating ripples of curiosity among the people who have built billion-dollar businesses delivering television and movies into the home the old-fashioned way. On the first day of the Consumer Electronics Show earlier this month in Las Vegas, two dozen chief technology officers from the country’s largest cable operators visited the company’s demonstration area. Then they told their colleagues, who swarmed Boxee’s booth over the next three days of the show.

Several cable companies declined to comment on their impressions of Boxee. One executive at a major cable provider said the Boxee service was intriguing and garnering an impressive amount of attention. But he noted that the company’s business prospects appeared limited.

“The real money in this business is made by serving the masses. There is a lot about Boxee that doesn’t work, like the business model, which is really nonexistent right now,” said the executive, who did not want to be named while criticizing another company.

Avner Ronen, Boxee’s 33-year-old founder and chief executive, said the company could make money after it built up its user base, perhaps by licensing its software to consumer electronics companies like TV manufacturers — which are clearly not experts at creating elegant interfaces or simple remote controls.

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.

At the very least, Boxee may spur consumer electronics companies to move faster to bring the Internet to their devices. The Consumer Electronics Show this year was full of announcements by companies bringing some pieces of Internet content to the television. For example, LG Electronics, the Korean TV maker, said it would bring Netflix’s Watch Instantly movie service to a new line of high-definition TVs. Samsung said it would bring Internet content, in the form of widgets from Yahoo, to some of its televisions.

Boxee is betting that consumers accustomed to the freedom of the Internet will not be interested in a dribble of online services on their televisions but will want more comprehensive access to Web video.

“Consumers and developers aren’t going to put up with the idea of one piece of hardware talking to only a few services,” said Bijan Sabet, a partner at Spark Capital, one of two East Coast venture capital firms that invested a total of $4 million in Boxee last year. “It would be like getting a Verizon phone you can only use to call other Verizon subscribers. It’s not a natural thing.”

Because its software is open source and can be modified and improved by any user or developer, Boxee can theoretically move quickly to add new video or music sites to its service, or to tailor itself to other electronic devices.

For instance, three months ago, Web developers in North Carolina created a special program to allow people to put Boxee on their Apple TV boxes. The program has since been downloaded more than 100,000 times, but primarily by people with some level of technical sophistication and patience. It must be reinstalled on the device every time Apple updates its software.

In developing its service, Boxee is not always asking for permission. Apple, for example, appears to prefer that Apple TV users get their content from iTunes, the company’s media store. Apple has shown little interest in giving third-party developers the freedom to create programs for the device, as they are allowed to do for Apple’s iPhone. An Apple spokesman said the company would not comment on Boxee.

Lawyers say that Boxee does not appear to be doing anything illegal, but that companies like Apple could try to take steps to prevent Boxee from accessing their content or working on their devices.

Mr. Ronen said that like many start-ups, Boxee was definitely leaping without looking. “Don’t assume we have lawyers. That’s expensive,” he said.

But he also noted that Boxee was giving consumers something they have long asked for: true access to Internet-style breadth and depth of content from their living room sofas. “The users and the technology will always move faster than the industry by definition,” Mr. Ronen said.