Thoughts on Boxee Ahead of its Public Launch

In preparation for Boxee’s anticipated public alpha launch later this week, I thought I’d share a few thoughts. I first became familiar with Boxee right before they launched their private alpha in June of last year. I met their co-founder Gidon Coussin through mutual friends at Flixwagon, was one of the early alpha users, and we even wrote about them on the Flixwagon blog. [more after the fold]

Boxee web content screen. Great web & stored content easily displayed on your TV

Boxee is home entertainment center on steroids, meets social network. It’s an application that allows you to easily navigate through and play any media (video, photos, music), from various sources (locally hosted or online), on your computer — and from it onto your TV — with an extremely user-friendly viewing experience.  Also, you can use a variety of widely available remote controls (such as an Apple remote), which gives you a traditional lean-back viewing experience while offering a substantially enhanced interface and unlimited variety of web content right on your TV. Finally, you can see what media your friends are consuming, either in Boxee itself, or via Twitter and other social network updates, which makes discovery easier and fun.

The folks at Boxee are doing it right. They offer a great user experience, neat-looking interface, a rapidly growing number of content sources (including Netflix, Hulu, YouTube, and many more), did a great job engaging the community and finding avid spokespeople via a CES video competition, and provide excellent customer service via Twitter (though I would personally maintain two separate twitter accounts: one to have dialogue with users, and one reserved only for company news and announcements, so as to keep the signal as clear as possible on the news front). Also, by basing their app on the open source XBMC - an open-source media player originally made for Microsoft’s Xbox game console, they saved a lot of work and benefited from a variety of community resources.

Boxee’s biz model will likely still take shape in the next few years, but the general idea currently is to have fee-based content recommendations (charged to the content owner), sponsored content categories, and plain old ads. These all could make sense. For a producer who could make say $10-50 CPM per ad on a video (depending on the type of content), it may be worth paying a few cents per-view to Boxee to make sure that content is featured on top (this would replace the costs of existing means of distribution. However, for these numbers to work, the producer would need to sell multiple ads, so this would primarily work for long form content – unless online ad rates continue climbing at a fast rate and far exceed TV rates). And given that Boxee has mass-market appeal potential, as well as frequent usage potential, sponsorships and ads are definitely a possibility.

And speaking mass-market appeal, one of the questions that come up is how fast can Boxee grow? While the company reached a spectacular 150,000 alpha user requests in less than 6 months, its market is currently mostly limited to people who are willing and savvy enough to connect their computers to a TV (leaving the social aspect aside for now, since the home media center is the crown jewel of Boxee). Most people I know currently don’t connect computers to TVs for a variety of reasons, mostly because they think it’s too complicated, or find that the experience just isn’t good enough –- pre-Boxee that is). This will likely change and grow over time. One way however to instantly expand that addressable market is by having Boxee available on the machines its code originated from – game consoles. These machines are already attached to TV screens, and their users are thirsty for content and apps. With over 80MM next gen consoles sold worldwide (Xbox 360, PS3, Wii) this has huge potential. However, that doesn’t mean it would be easy. Getting Boxee to officially run on these platforms could require extensive development, reaching agreements with the manufacturers, or just waiting for the hardware to be robust enough (in the case of Wii for example). However, again, this could substantially boost the number of potential users, and a lot of the development may actually be done by the community. It’s very possible that Boxee founders will find themselves exchanging business cards with people from Sony, MS, and Nintendo at CES this year (not to mention with regular home entertainment equipment manufacturers).

Another avenue is to partner with other set-top boxes currently in the home: i.e. Tivo and cable companies. This seems less likely at this point though, for a number of reasons: for one, Boxee sees itself as CableCo killers. They want to become the primary enabler of content in the living room in a few years. Secondly, integration with all the different types of set-top boxes, operating systems, and interfaces out there will require tremendous work and could take years to reach a substantial number of households. Boxee is probably better off focusing on its feature set at this point. However, you never know what might happen. In a couple of years partnerships like that could make sense — or even an acquisition, like in the case of SlingBox and Dish Networks.

At this point, if Boxee can continue improving its product, educating audiences on the value of running Boxee as your home media center, and forging the right kinds of partnerships, both on the content and delivery/distribution side, it can do very well.

Temptation Island on Boxee. Some viewing choices are best kept private.

And finally, if the folks from Boxee are (still) reading, some thoughts on the app functionality. While I do really like the alpha interface, here are some things I would think about for upcoming versions:

• Allow to lock the main navigation sidebar in position: currently the nav sidebar disappears and reappears on hover. I personally would prefer to have an option to lock the nav bar in place so I could always quickly return to it, rather than watch it open and close all the time.

• Easy Exit, Back, and Toggle: Exiting Boxee is currently done either by going back to the nav bar and clicking ‘Exit’, or by using a keyboard shortcut. Toggling away from full screen is done only by keyboard shortcut to the best of my knowledge, and going back is done by hitting Esc or using a remote button. However, memorizing a shortcut (or even reading the tutorial) is something not everyone will do, and when using just a mouse, going back to the main nav bar requires several steps. Having fixed ‘Exit’, ‘Toggle’, and ‘Back’ buttons across the app would make things easier. Also, a ‘Cancel’ button on the Exit screen would be useful in case you don’t want to reach for the ‘Esc’ key when not using a remote.

• Privacy: at present, Boxee social sharing is all or nothing. Either your contacts (or the world) get notified on everything you watch, or on nothing. However, some people would want to share certain things, while keeping others private (for example that trash reality show you secretly watch, not to mention some X rated content).  Having a way to indicate which content categories would be shared, or having a “don’t share this” button  alongside content can be very useful. May not be easy (look at how complicated Facebook permissions have become), but still doable in a user-friendly way.

• Include sub-categories in certain channels: currently when you access YouTube via Boxee, you can see the main video categories (Featured, Most Popular, Top Rated). However, there is no sub navigation within each category. So for example, while on YouTube’s site you can view the most popular today, this week, this month, all time etc., currently in Boxee only ‘All Time’ shows up.

• Custom Shortcuts: if I have certain favorite channels, for example a music library, Hulu, or even the TV shows section within Hulu, it would be nice to create a custom shortcut to take me directly there from the home screen.

• Info on settings: Boxee has lots and lots of options in the settings area. However, most of them mean very little to the average user without further explanations. Having an ‘info’  button next to each option will make it easier for users to customize and enhance their experience even if they are not very home-electronics savvy.

• Unified settings: currently the account settings are managed only via the Boxee wesbite and cannot be accessed in the same area as the application settings. Having all settings in one place would make all of them easier to find.

I’m sure Boxee is aware of a lot of these and may have some of them already in planning. Anyways, keep up the good work guys!