Finance

Samsung Buys Boxee

CE Giant Confirms it Has 'Acquired Key Talent and Assets From Boxee' 7/03/2013 8:00 AM Eastern

Samsung confirmed Wednesday that it has acquired Boxee, the maker of over-the-top video streaming devices, including a new model that has been paired with a cloud DVR service.

“Samsung has acquired key talent and assets from Boxee.  This will help us continue to improve the overall user experience across our connected devices,” a Samsung spokesperson said in a statement to Multichannel News. In addition to connected TVs, possible ports of entry for Boxee’s UI on the Samsung product lineup include Blu-ray players and a new retail CableCARD device in the works that will combine live TV with over-the-top video.

Samsung declined to provide financial terms of the deal, but published reports Wednesday put it at “tens of millions of dollars,” but less than the $28.5 million Boxee has raised since it was founded in 2007. Another report said Samsung will take on Boxee’s workforce of roughly 40 employees. Boxee is headquartered in New York City and runs R&D out of Tel Aviv, Israel.

Boxee has not released any product shipment figures lately, but the company has historically struggled to achieve big sales volumes. Last April, Boxee tweeted that there were 200,000 users of the original Boxee Box, equal to about 10% the Boxee's total user base at the time, which included consumers who used the Boxee UI for PCs, a product that the company discontinued in 2012.

Confirmation of the deal comes about two weeks after rumors circulated that Boxee was seeking to land a $30 round of funding or was close to securing a buyer. At the time, Boxee would only confirm that it was pursuing fresh funding. 

The original Boxee Box and the new Boxee Cloud DVR are made by D-Link, which makes Samsung somewhat of a surprise suitor.

Neither Boxee device supports a CableCARD, but the $100 Boxee Cloud DVR is now capable of receiving an encrypted version of Comcast’s basic digital video tier via a new type of Ethernet-connected Digital Transport Adapter. A new set of basic TV encryption rules handed down by the Federal Communications Commission last year have also paved the way for IP-based retail devices (like Boxee’s) to receive basic TV tiers without a CableCARD from several other major MSOs, including  Time Warner Cable, Cox Communications, Charter Communications, Cablevision Systems, and Bright House Networks. 

Boxee’s Cloud DVR service is currently available in Atlanta, Chicago, Dallas, Los Angeles, New York City, Philadelphia, Houston, and Washington, D.C. The free version provides five hours of DVR playback a month, keeps recordings for up to 90 days, and only allows DVR playback on a TV.  The premium, $9.99 per month version offers unlimited and perpetual DVR storage, and lets users access recordings on TVs, PCs, tablets and smartphones.

Unlike rivals such as Roku, which has shipped over 5 million streaming devices in the U.S., Boxee has yet to announce any deals to support TV Everywhere apps. Apple TV, meanwhile, has added the HBO Go and WatchESPN app and is reportedly poised to strike a TV Everywhere deal with Time Warner Cable.

Samsung’s comments about how Boxee will help it improve the overall user experience on connected devices cast some doubt as to how Samsung intends to maintain Boxee’s focus on hardware down the road.

But the Boxee UI could be a candidate for the Smart Media Player, a CableCARD-based retail device under development at Samsung that will support subscription video services alongside OTT fare from the likes of Netflix and Vudu and wrap it all into a uniform navigation system. According to FCC filing in May, Samsung plans to release the device to retail partners by the end of the summer.

Samsung has also become a force in the U.S. cable set-top box market, counting Time Warner Cable, Bright House Networks and Cablevision Systems as key customers. The CE maker also has deals in place to support authenticated TV Everywhere apps from Comcast and Time Warner Cable on its new line of Smart TVs. TWC, for example, will offer about 5,000 VOD titles on Samsung TVs (2012 models and newer) later this summer, with plans to offer live TV streaming by the end of 2013.