Input one. It is the most valuable connector on the back of the average American television — and by extension, the most valuable connector in the average American home. Input one is what you plug your cable box into, where your DVR lives, where you go to watch sports and awards shows and breaking news. It is such precious ground that companies like Apple and Microsoft and Sony don’t even bother with it — the Apple TV and Xbox 360 and PS3 all fundamentally compete for input two. Input one belongs to Comcast and Time Warner Cable. Input one belongs to television.
Avner Ronen and Boxee want to change the way you think about input one.
The new Boxee TV is an unassuming $99 device with a surprisingly radical feature: dual TV tuners. Plug the Boxee TV into your existing basic cable line or an HDTV antenna, and you’re watching television using a fast, fluid interface light years beyond anything from a cable company. Pay $14.99 a month and you get access to a second radical feature: a cloud-based DVR with unlimited storage that lets you play multiple shows simultaneously on PCs, phones, and tablets. You can even start a recording and watch it quasi-live from your phone with a slight delay. Not enough? Eventually you’ll be able to buy another Boxee TV and have those two tuners record to the cloud as well. Buy three Boxee TVs and you’ll get six tuners. There’s no limit.
"I compare it to moving from film cameras to digital cameras," says Boxee CEO Avner Ronen. "You don’t need to think about it. You want six seasons of Seinfeld? Go for it." The vagaries of copyright law mean that Boxee has to upload and store an individual copy of each show to the cloud for each user, but Avner’s not worried about it. "The cost of storage is going down all the time... which is a very liberating notion." The downside to putting all the storage in the cloud is that you won’t have much to watch if your internet goes down — Boxee TV doesn’t have any local storage.
You also get all the other stuff you’d expect, of course: Netflix, YouTube, Vimeo, movie rentals from Vudu. There's even a Pandora apps for listening to music. But that’s input two stuff — Roku and Apple TV territory. Without TV tuners, those devices have to rely on hundreds of apps to stream content over the top, an approach Avner calls "a failed concept." That was ultimately the problem with 2010’s Boxee Box, a sharp-looking device that failed to gain traction as an app-based media streamer. "We’re not going to spend a lot more energy on that," says Avner.
Rebooting the product as Boxee TV and adding live television and a killer DVR to the mix allows Boxee make a serious claim to input one — and a serious claim to being the go-to device for cord cutters. "We want to pass the babysitter test." says Avner. "Just turn on the TV and watch something." The remote is far simpler than the previous version, with just a D-pad, home, back, menu, and play buttons, and dedicated buttons for Netflix and Vudu. Even the box is simpler — the striking, angular look of the Boxee Box has been replaced by a standard black box. The only hint of style is on the bottom, which is fluorescent green.
But the most important part of the Boxee TV package might well be the small bundled antenna — a little black stick that extends to just over two feet long in exactly the same manner as an old cordless phone antenna. That’s what gives you free access to a world of network television broadcast over the air — ABC, NBC, CBS, Fox, and a host of other stations that still maintain large transmitters to bathe the country in glorious uncompressed HD. "If you have a digital antenna and good reception, it’s a beautiful picture," says Avner. "But the challenge is that most people don’t realize they can get it." If you don’t have good HD reception, Boxee will point you straight to basic cable, which will give you the same networks for a fairly small monthly fee.
What you don’t get, of course, are premium cable channels. There’s no ESPN, no HBO, no Showtime, no AMC. It is a fatal flaw if you’re addicted to Game of Thrones or Breaking Bad or the NFL RedZone channel, and Avner isn’t shy about it. "Some people have to watch every Yankees game or every Knicks game, and they’re not going to cut the cord because we have a nice new device." But he’s not backing down, either. "The reality is that 89 of the top 100 shows last year were on broadcast. 95 of the top 100 most-watched events were on broadcast. Most of what people are recording is on broadcast." The message is clear: pay less for cable, still get most of the shows you want, and spend a little of the savings to get your favorite cable shows elsewhere.
"We want to pass the babysitter test. Just turn on the TV and watch something."
"If someone spends 8 bucks a month on Netflix or 80 bucks a month on Comcast, it doesn’t hurt our strategy."
It’s a compelling argument, but it’s just a first step towards building new kinds of TV devices. More than any other tech company, Boxee has transitioned from rebellious outsider to working closely with the cable companies — the FCC just issued new rules allowing cable providers to encrypt basic cable based on a joint Boxee / Comcast agreement that lets devices like Boxee TV access those channels with a future software update. And if Boxee can find a way to work with Comcast on decrypting the basic cable tier, it could very well find a way to decrypt HBO in the future.
"We would love to support the extended tier," says Avner. "If someone spends 8 bucks a month on Netflix or 80 bucks a month on Comcast, it doesn’t hurt our strategy. What we want to do is build a better experience and get people to have Boxee when they turn on their TV." And it seems like Avner’s heard a lot of agreement in the industry at large. "The people in the media companies and the cable companies, I think most of them do get it. They’re extremely smart, but they have real business challenges."
Who is this person, and what has he done with the Avner Ronen who once hired the SuicideGirls to promote a public beta of Boxee PC software not-so-subtly designed to make playing back torrented videos easier?
The Boxee story starts nearly a decade ago. "I moved to New York in 1999 and I was blown away from the amount of channels," says Avner. "We didn’t have that in Israel. So I got the biggest package, you know, 40 movie channels, and I remember sitting with my wife spending entire evenings being shocked at how many movies were on at the same time." Several years later, Avner started Boxee after one of his friends showed him how to hack an Xbox to serve as a media center. "We said ‘this is so complicated — we can do something with it and make it more accessible.’"
The five-person company quickly gained a rockstar reputation: holding events at Brooklyn concert venues with the SuicideGirls certainly helped, but Avner’s affable personality and the company’s revolutionary spirit captivated users who were installing Boxee’s version of the open-source XBMC app on old PCs and experiencing a glimpse of the future. But that reputation set the company apart from the media industry, which viewed Boxee warily as a company profiting from piracy both real and imagined.
"We came into this business really from a product perspective, not an industry perspective."
The conflict itself was real, however, and manifested itself in strange ways. Former NBC president Jeff Zucker told Congress that Boxee was "illegally taking" Hulu content by simply playing back videos in the browser, while a crowd of Boxee fans at the 2010 Boxee Box launch event lustily booed when Avner announced Netflix and Hulu Plus support. "We came into this business really from a product perspective, not an industry perspective," says Avner. "We weren’t as savvy about the different interests and the way the machinations of the business actually work. I think now we’re much more sophisticated."
Nowhere is that more reflected than with Boxee’s agreement with Comcast on encrypted basic cable. That’s Comcast — the company whose buyout of NBC was the reason Jeff Zucker was called to testify in front of Congress in the first place. Boxee’s gone from hated pirate outsider to shaper of telecom policy, and it’s done it by extending an olive branch to the largest and most entrenched interests in the business. XBMC and open source are gone now, replaced by a proprietary OS that’s built to support end-to-end content encryption and a policy compromise Avner describes as "very reasonable." And Boxee’s deemphasized its famously comprehensive support for weird video files as well — weird video files that generally come from torrent sites. "We didn’t call it Boxee Box 2," says Avner. "We called it Boxee TV."
"We found a way to be disruptive but not destructive."
"I think we got to know industry much better and the industry got to know us," say Avner. "We found out there are places where we disagree about the future of television and what users want, but we also have many places where we actually see eye-to-eye." It’s clear he’s thought about this. "We found a way to be disruptive but not destructive."
Just consider the cloud DVR, which takes something that’s essentially free on a standard DVR — recording shows to watch later — and turns it into something that counts against your bandwidth cap. Avner says that while data caps are "a concern," he’s anticipating most people will be fine streaming "tens of hours a month." But there’s an element of pragmatism as well. "I think broadband providers will like us. If this is a product that gets users to be hungry for more bandwidth that’s a great business for them." And it’s great business for Boxee, which is breaking even on the Boxee TV hardware as a way to sell the cloud DVR service.
If you’re a cable company worried about cord cutters, Boxee TV lets you get rid of a warehouse full of rotting Motorola DVRs and grow your broadband revenue all in one shot. It’s not a bad pitch — the DVR will work with almost any speed connection, but Avner recommends a minimum of 2Mbps up and 5Mbps down to get the best quality from the DVR’s 2-4Mbps video streams. A lot of people might have to upgrade to get those speeds, even while cutting back on cable. "I think there’s a good reason for cable companies to actually embrace this box," says Avner. "I don’t think they view owning the cable box as necessarily critical."
There are still many challenges ahead: Boxee has to convince a public used to relentless innovation and seamless internet delivery that plugging in a TV antenna is still a good idea. (And judging from the confused interns in The Verge offices, Boxee will first have to explain the idea that network TV is freely available with an antenna at all.) Things might be friendlier with Comcast but there’s no Hulu Plus app in sight. It’s clear Apple and Microsoft and Google are all determined to make a play for the living room sometime this year. The cloud DVR will take effort to roll out, so it's only launching in New York, Los Angeles, Chicago, Dallas, Houston, Atlanta, Philadelphia and Washington, DC to start, with other markets coming online next year. And, well, the damn thing still doesn’t have ESPN.
But Boxee seems uniquely suited to handling those challenges. In a market full of companies innovating over the top and around the edges of television, Boxee is one of the few that’s working on improving TV itself — the Boxee TV makes it easier and cheaper to watch the vast majority of popular TV content. The killer app for TV is still TV, after all. "For most people TV is not broken," says Avner. "The traditional industry, the incumbents, they have time to go through a gradual transition that is much easier than facing a cliff." And it seems Boxee has positioned itself to be among the leaders of that transition — the 45-person company helping behemoths like Comcast lean into a future beyond the cable box. A future beyond input one.
"This is the new Boxee," says Avner with a smile. "We’re trying not to piss people off."