South Korean electronics giant Samsung acquired the streaming media startup Boxee; the now Boxee Samsung has not yet disclosed the price of the sale, or why it wanted Boxee, but several rumors are flying around. The general consensus is that Boxee sold at less than its full value, but all employees will transfer over to Samsung. Boxee also has to end its cloud-based DVR service, Cloudee, which may not make many customers happy.
What Is Boxee?
Originally, Boxee was an open-source freeware application that allowed a users to use their television as a social media tool. Viewers could rate and recommend video, TV, and movies to their friends via Facebook and Twitter. The last few years have caused Boxee to jump to different companies in search of funding and brought accusations that the company was breaking the General Public License for taking freeware code and marketing it. When freeware is created, the General Public License states that the code will always be free for developers to share. Boxee claims that all freeware code was removed.
Why Did Samsung Buy Boxee?
The exact reason is still unclear. Samsung is not exactly forthcoming with any information about the Boxee buyout except to say, “Samsung has acquired key talent and assets from Boxee. This will help us continue to improve the overall user experience across our connected devices.” Boxee offers a bit more detail, stating that “joining Samsung means we will be able to work on products that marry the best hardware and software in the TV space, products that will be used by tens of millions of people and will help to shape the future of TV.”
Speaking of TVs, one wonders if Samsung is thinking of using the Boxee technology for their smart TVs. Each year, Samsung comes out with new technologies and/or gadgets for their smart TVs. But they just can’t get the sales that are needed to consider it a successful venture. However, adding a new feature like Boxee to the mix may not help solve this problem. There are two major issues with the smart TVs: the high price and whether consumer desire is strong enough at this point. The smart TV is modeled, broadly speaking, after the smart phone. The question is, does the consumer want their TV to be more than just a TV? Media Post reported about smart TVs, “…only about half — or 12 million — are Internet connected and not using the new television sets’ fullest capabilities….”
Let’s say that Samsung is going to use the technology in its smart TVs, but it also wants to let Boxee continue what it was doing. Roku recently announced five million units sold and that it has added two new investors investing $60 million. Apple TV has added HBO Go and WatchESPN apps to its service and is currently in talks with Time Warner Cable for a TV-Everywhere deal. Intel has also announced that they will be introducing a new Internet service.
These are heavy hitters. The market is large, and they all want a piece of the pie. The good news for Boxee is that, with the amount of competition increasing, the financial and corporate support of Samsung could keep them in the running. The bad news is, if it doesn’t, then Samsung may get frustrated and just close the Boxee project.
In today’s technology market, there are not not always happy endings for the absorbed startup. The next 1 to 3 years will most likely decide the fate of the Boxee-Samsung union.
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