Boxee is getting so successful that many of its users are seriously considering to stop their Pay-TV subscriptions.
Boxee is a cool open source software for Media Centers based on Mac or Ubuntu. This software transforms a Mac Mini, Apple TV or any Linux small-form PC into a social network set-top-box. With a great user interface, Boxee enables you to enjoy on your TV not only your media library but also online video such as YouTube and Hulu, as you interact with your buddies.
Hulu -the joint venture of NBC Universal and News Corp- offers a sensational online catalog of TV shows from their parent companies and others, that has made their user growth in 2008 stunning.
Such is the success of the Boxee-Hulu combination that Hulu’s content providers have requested Hulu to be removed from Boxee, in an attempt to stop cannibalizing their traditional revenues from TV ads and Cable networks.
Again the traditional Innovator’s dilemma in front of a disruptive threat. Innovate first and cannibalize yourself? or wait and risk to be eaten by others with less to lose?
NBC and News Corp might worry about Online TV in the short-term, but in the long-run it will ony bring good news:
- CPM of Online TV should be higher than traditional TV. As marketers say, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half”. Online TV ads can be targeted to specific viewers. Interactive responses can be measured. That should reduce wasted ads, and therefore advertisers will be ready to pay more for an Online TV Ad.
- Online TV might display less ads per show than traditional TV, but ads are at least seen. A way to avoid all the wasted ads wiped out by DVRs and Tivos.
- Online TV can enable Content Providers to sell subscriptions for premium content and VoD directly to the user without any Cable intermediary.
If Hulu is able to build a stronghold in online TV, they will capture all the benefits of a richer online TV in the long-run.
The ones to worry about Boxee are the Cable and IPTV operators that will need to ad significant value to avoid being by-passed by over-the-top solutions such as Boxee, and dumped by their customers. There is time. Boxee is great, but still for Mac or Linux geeks, a minority.
“The question is not whether Telcos want to be a dumb or a smart pipe. They are already a dumb pipe. The question is do they want to be something else on top?”
Max Foresite – Telecom, Internet & Media Analyst