[So, immediately after I mentioned horror stories in cable company customer service, I got great service from my cableco. Although, that was in response to the literally immediate failing of my television and internet. Conspiracy? Prob not, unless it goes down tonight too]
Here are some of my ideas for Boxee to generate revenue. I'm focusing mostly on the video services, but Boxee also provides the ability to listen to music. [Also, please understand that I could talk for hours about each of these options. I tried to balance brevity with background.]
1. Get onto the cable or telco's set top boxes.
Cable companies control the television through their cable boxes. Getting into those boxes opens up a new world of potential user to your software.
This has to be the most unlikely of all of my suggestions because the cable companies don't want to give up control over the television. TiVo has been trying this strategy for a while with limited success. Even though they have gotten themselves on some Comcast and DirecTV boxes as a premium service, these agreements haven't reached their full potential. The cable monopolies continue to dominate. IPTV services like U-VERSE and FiOS might want a differentiator (which FiOS brought with whole home DVR).
However, for a long time the music industry thought it had a nice monopoly. As the distribution and consumption habits changed, Apple has taken control of nearly everything through iTunes (even though their DRM should turn off consumers and drive them to Amazon, but that's another post). Itunes even has made inroads into downloaded television programs and if they ever decide to focus on AppleTV, it could put a lot of pressure on the incumbent boxes. Maybe it's time for the cable companies to get out in front of this thing. The right software on an existing box can transform that loud, slow, unextensible box into something really strong. [Aside: it's amazing how lacking the existing boxes are. People are forced to put up with it because they don't know what could be better, but that's another post].
Why shouldn't the cable companies be happy to take $7 a month (what they get now) from any number of set top boxes and let box keep the premium above that?
2. Get on ANY set top box
There are tons of companies working on being the set top box that finally bridges the gap between computer and television. It seems unlikely that many of them will be able to successfully make their value proposition work to end consumers, unfortunately. The low chance of success of these companies could be an opportunity for Boxee to be basically outsourced UI design and help them conserve cash (especially right now). If you can be the software on every box, you can be the Microsoft of home media. You can make it easier for people to switch between boxes because of the common interface. That could drive hardware sales similar to sales of stereos and VCRs in years long since passed. Which could appeal to today's hardware companies.
Obviously this plan probably has a lot more development costs associated with it. Think of why they chose to build on Apple machines first, one type of hardware makes development way easier.
3. Make deals with content providers
Similar to how Netflix made a deal with Roku, why couldn't Boxee make a deal with Netflix? Why couldn't Boxee make deals with every content provider, Including the traditional networks?
If CBS needs more eyeballs watching its shows, wouldn't they be willing to pay a share of revenue for those eyeballs? Obviously, Boxee could be more targeted in its advertising than traditional television (as all new media products propose to be) so that should have value to advertisers and in turn content providers. This would be low-risk for the providers as it could be completely variable pricing based on the impressions, potentially with guarantees, etc.
Further, who knows how Hulu will be operating in a few years. Hulu could be buyers of original content not shown on TV first and basically become the world's first online 'network' with syndicated and original content (Boxee could become that as well, but Hulu has the head start here). That makes companies like Hulu and Joost and even YouTube potential partners (assuming they can figure out their own sufficient revenue streams).
4. Sell premium content
If Boxee provides the on-demand viewing we've all been waiting for, in addition to the helping us discover new content that we want, Boxee could sell downloads, rentals, individual channels (like a la carte pricing IPTV has been promising).
You can even leverage the social networks that Boxee is tapping into. When a friend buys a program, you could let them share a version that has commercials in it. Potentially, a whole load of friends would be buying the same content.
5. Launch an app store for plug-ins
Similar to how Apple does it with the iPhone. They provide value in the being the operating environment. If they can make plug-ins easy to buy and install, people might do it, but there are major hurdles to clear in order to get people to pay and download anything. Depending on how the above strategies play out, you may still have only a core of users who dowloaded Boxee already, in which case they would be more likely to pay for add-ons. I'm not sure exactly what those add-ons would look like, but that's why it's an app store and not a feature request. This is can be considered a modified 'freemium' model.
When I first wrote these down, I thought they were groundbreaking (or at least creative). Are they still that way? I'm not as sure. When I finally get to my post about the ideal mediacenter (based on technology that is around today), it will be more clear where I'm coming from.
However, Boxee's focus on Apple and Linux gives it a great foundation with people who are generally ready to find and install software. It also makes a bet on Boxee look a lot like a bet on Apple. The only real concern is whether they might be too early.
As always, readers, the floor is yours. What do you think?
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