Why Boxee's Box Doesn't Matter–And Why It Does

I’ve seen lots of oohing and aahing about the new Boxee Box that rolled out Wednesday. I haven’t played with it yet, but for now I’ll assume it’s as cool as the gadget press says it is.

But let’s be clear about what the Boxee Box is, and what it’s not:

• It’s not going to generate any significant revenue for the Web video company.
• It’s not the way that Boxee imagines most people will end up using its software.
• It is a starting point for the company.

Boxee’s real plan is both clear and a bit undefined: It wants to get its software on as many devices as possible–not just the Boxee Box but everything from Sony’s TVs to Microsoft’s Xbox 360s to Samsung’s Blu-ray players. And then it wants to build some kind of business based on advertising, consumer payments or both.

So Boxee isn’t trying to make money by licensing its software to hardware companies, any more than Netflix or Pandora is when they get their apps installed on different gadgets. It’s giving D-Link, the company that’s actually making the Boxee Box, its software for free. And it will do the same for other hardware companies.

Or put another way: Boxee competitor Roku is all about selling the Roku box. Boxee is all about getting its software in between video owners/distributors and video viewers, just like Google TV wants to do. The Boxee Box is important because, if it works, it will help Boxee convince other hardware companies that they need its software, too. (It might also help the company close its funding round, though I get the feeling it has investors ready to cut checks right now.)

For whatever reason, some of Boxee’s legion of fans–this is a company that packs concert halls for product rollouts–seem unclear about what the company is trying to do. So do some non-fans outside the company, like über-blogger Om Malik.

So yesterday, after Twittering about the topic with Malik, and then with Boxee investor Bijan Sabet, I got Boxee CEO Avner Ronen to stand in front of a Flip cam so he could explain the plan to all of you at the same time. We also touched briefly on Boxee’s relationship with Hulu. Ronen confirmed what I’d reported on Wednesday: Hulu Plus will come to the Boxee Box, but the free Hulu service won’t be available.