Boxee Goes Hunting for Big Bucks

Boxee, which makes software that makes it easy to watch Web video on your TV, celebrates a big milestone this week, when the first Boxee-branded hardware starts shipping to consumers. The start-up is celebrating with an event at New York’s Irving Plaza.

But the company’s next big move likely won’t happen in public view: Sources say Boxee is out trying to raise a significant funding round, likely in the $10 million to $15 million range.

I’m told that existing investors Union Square, Spark and General Catalyst, which have helped Boxee raise $12 million to date, all plan to re-up, and will likely pick up half of the round. No word on who the new money is, or how close the round is to closing.

CEO Avner Ronen will need it sooner than later, though. His two-year-old company now has a significant payroll–33 people, at last count–and very little revenue coming in the door.

The new Boxee Boxes shipping this week won’t change that. Boxee isn’t trying to succeed by charging manufacturers like D-Link, which is making the devices, big licensing fees.

Instead, it’s trying to build a significant audience by getting its software on lots of hardware–TVs, Blu-ray players, game machines, etc.–and figure out a way to turn that into money down the line. Boxee is at 1.4 million users now, but that’s not nearly big enough. It wants Pandora- or Netflix-like scale.

This is an interesting time for Ronen to be out pitching: The existing TV industry is ripe for disruption. And the idea that consumers will watch Web video on their TV is moving from science fiction to reality, spurred on by the likes of Hulu, Netflix, Apple TV and now Google TV.

But Google TV’s mission–to merge Web video with traditional TV on one screen–is pretty much the same as Boxee’s. If Google figures it out, it would seem to crowd out the competition.

On the other hand, TV programmers who are wary of Google’s dominance might very well welcome multiple competitors. Which may be one of the reasons that Ronen is supposedly getting a much warmer reception from traditional TV executives than he used to get.

http://twitter.com/hurtle24 Hari Seldon

“But Google TV’s mission — to merge Web video with traditional TV, on one screen — is pretty much the same as Boxee’s.”

I disagree that the two have the same mission, Google want viewers to search with their box. I watched the video of their recent event, where they were demonstrating the the way that Google TV works and it struck me as a very PC-centric way of watching TV, I don’t believe that it will be successful.

Boxee on the other hand presents existing web video in an accessible way and yes, I’m sure the webkit based browser in the new software update will allow viewers to search, but it is not really required. Having used Boxee on my hacked Apple TV for a while now, I find the user interface very friendly and easy to use and with the growing number of apps, the potential is obvious. However the Apple TV is just too under powered to handle Boxee smoothly. So I have ordered the Boxee Box and I am counting the days. . .
http://sisyph.us/ ErikSchwartz

Google TV’s goal is very different than Boxee, Apple or Roku. GTV is designed to fit into, and augment, the viewing experience with the existing TV distribution channels.

The others are designed to replace those the existing TV distribution channels with a 100% IP based streaming environment.
http://mediamemo.allthingsd.com/ PKafka

I think that’s too fine a distinction: Boxee, Apple, or Roku aren’t insisting that you don’t watching TV via traditional means — they’re just giving you access to more video via the Web, just like Google does. Google has gone out of its way to *explicitly* loop in traditional outlets, which is a pretty smart move, and a requirement for Google given the worries it engenders for incumbent media.
http://mediamemo.allthingsd.com/ PKafka

Google wants you to consume Web video using its interface, just like Boxee does. And it’s basically device agnostic — or at least it wants to be Just like Boxee would like to be.
http://sisyph.us/ ErikSchwartz

Fair enough. But to succeed they need the mainstream adoption of streaming. The gating factors (the really hard problems) in the mainstream adoption of streaming are largely in the network infrastructure and in the hands of companies like Akamai and Verizon, not companies like Boxee.
http://mediamemo.allthingsd.com/ PKafka

Need to solve both at same time, and plenty of smart folks tell me that network issues will be much harder to solve than interface ones, as you suggest. But unless it’s easy for regular consumers to grapple with at the get-go, they’ll never have to worry about capacity problems.
Anonymous

Boxes, boxes, boxes. Why are we talking, essentially, “thick clients” here? Isn’t it a better idea to leverage the cloud? I keep coming back to ActiveVideo Networks’ CloudTV platform and wondering why more companies aren’t adopting that approach.
http://mediamemo.allthingsd.com/ PKafka

Boxes are an intermediate step, and if IPTV works, it will certainly be dependent on the cloud. But IPTV will need, among other things, a useful interface, and that’s Boxee’s focus.

Boxee Goes Hunting for Big Bucks

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