Boxee CEO Avner Ronen talks about the Boxee Box, programming, Netflix, Hulu, and an industry revolution

FierceOnlineVideo caught up with Boxee CEO Avner Ronen last Week at Streaming Media West in Los Angeles, where he talked at length about the Boxee Box, its $199 price tag, content providers, Boxee CEO Avner RonenHulu Plus, Netflix and the future of streaming media.

The Boxee Box ships Wednesday and should start arriving in the hands of those folks who pre-ordered it as early as Thursday. Ronen
said the device should start appearing in stores on Nov. 17, and will also launch worldwide by the middle of the month.

He says he's looked at Apple TV, Roku, Google TV and a number of other content hubs over the past few months and said his favorite is--surprise--the Boxee Box, which is being produced by D-Link. His "whys," however, might surprise you.

Boxee CEO Avner Ronen looks a tad rumpled in a Boxee sweatshirt and jeans as the launch date of the new Boxee Box nears. Speaking to an audience at Streaming Media West, he's both comic and social commentator, poking gentle fun at his company's newest entry into the world of content hubs, while at the same time reminding the audience that the Boxee Box is better than Apple TV, for example, because its open source; but at a disadvantage because it's twice as expensive.

Both have the potential to be game changers but, well, Apple is Apple.

"Frankly, everybody should be scared of Apple in the market, and of Microsoft and Google. They're going to change things. It could be a scenario where Apple does very well, or Google and all the rest do," he says. "It's a huge space and there's many ways to play."

But even as he proclaims Boxee's intent to maintain it's embrace of open source, ("We would not have been able to be here today without the help of the open source community," he says) Ronen also acknowledges it may not take being open to be the eventual winner.

"This isn't about just whether it should be open or closed," he says. "And open is not the only way, of course, just look at Apple and the App Store and iTunes... the big question is whether that approach will be relevant enough to attract a big audience."

Boxee, and any number of other connected devices, are starting to hit the shelves. Apple TV and Google TV both launched about a month ago, and Roku, connected Sony TV's and others are hitting their marketing stride as the holiday shopping season gets closer; there's no doubt they'll have the edge as far as consumer awareness, simply because they've been on the market longer. But, said Ronen, it's not that big of a deal: the pie is too big for anyone to be in control of it... yet.

Ronen believes connected TVs and content hubs are not only going to change the way we get our entertainment delivered, they're going to change the way we consume it, leading a major shift in the industry.

"The smart TV will have the same impact on the television that the smartphone has had on the mobile phone industry, and CES in January is going to be full of them," he says. "Once you have that type of experience, it will change everything; it shakes up the user experience, and business models. It will allow users to do things that, up until now, they haven't been able to do."

Apple said it sold 250,000 of its new Apple TV in the last quarter, insiders at Roku say they expect to have about 1 million of their devices in homes by the end of the year, and Google TV? Well, that roll out is still gathering speeds--and hitting speed bumps along the way--so, there aren't many hard numbers available for it yet.

Right now, Ronen says, Boxee's market is all about early adopters, something that he doesn't expect to change over night.

"The mass market is not going to go out and buy Apple TV, Google TV or Boxee Box just because they want it," he says. Boxee Box by D-Link"They're going to wait until they need a TV; when they look at replacing their TV--and that's a five- to seven-year cycle--that's when they're going to look at a new device."

They're also going to look at what content is available, he says. And, unless programmers see the potential to turn a buck over the top, it may not be attractive enough to convince buyers to jump in.

"Content availability is the biggest issue we face, and hopefully it's a short-term challenge," Ronen says. "I try to apply logic to that part of the industry, but sometimes it's difficult. I think the real challenge for them is the existing business model, they don't want to threaten it too much.

"We do think that gradually content owners are going to put out something they have confidence in, maybe as simple as a $10 paywall or an ad-supported model they're comfortable with."

That comfort level, he says, may be easier to reach since Apple has 100 million credit cards users on file with iTunes, and Microsoft has 25 million more with Xbox.

"There's starting to be a critical mass of people with connected experience, people who are not pirates by nature, they just want to be able to access content," he says.

For the Boxee Box, that may prove a tad problematic. Like just about every other device, it's having a tough time convincing Hulu that the catch-up site should allow Boxee and Boxee Box users to have access to its content.

"At the moment, we don't have a Hulu application for Boxee Box, although you can access it through a browser," he says, before quickly adding, "Of course, they blocked Google TV and we, obviously, have a history with them so I'm not naive about it."

And, he says, he understands why the media companies that own Hulu--NBC Universal, Disney and News Corp.--are worried about letting their content be delivered over the top, and the lost revenue they see floating across the Internet.

"They have a point," he says, "but at the same time, I'm saying to them 'please, offer me an option.' There's a real sensitivity with those shows coming up on the TV screen, especially with the retransmission fights going on, but, you know, I have a Hulu Plus on my iPad, I'd pay for it to be on Boxee Box."

Whether Netflix, which has been a Boxee partner for some two years, will be available on the Boxee Box when it launches also is up in the air.

"Officially, we have to say that we hope to have them on the Boxee Box when we launch. I guess you'll have to wait until next week for that. (Boxee VP for Marketing Andrew Kippen reiterated that when asked about Netflix on Sunday night: "We've had Netflix on Boxee for the past two years and we hope to enable all Boxee services on the Boxee Box," he said. "If we can't do that, we'll make an announcement to that effect."
In the meantime, the Boxee Box is offering users a unique experience.

The Intel-powered device can add content to your queue automatically, bookmark content, help you keep track of what you want to see and show it on the best screen in the house. It will support Windows Media Room, Widevine DRM, Vudu DRM; it's a must-have, Ronen says, for 1080p content from studios.

Boxee Box will allow each person in a household to have their own account with their own settings and individual links to Facebook, Twitter etcetera because, as Ronen says, "we see the social aspect as very important."

But even as he lists the ability of individuals to have their own setting on the box as a plus, he says the company is still wondering if that's really a good thing.

"The issue... is that TV is a social device, and I'm not sure we've figured out how that's really going to work; it is such a shared social device, and that makes it a little weird."

The Boxee Box is launching in the U.S., Canada, Australia, New Zealand and the European Union (including the U.K.) over the next two weeks. But, Ronen said, users can expect more attributes and features to be added in the coming months, including the ability to pay for content online with a credit card (it's not quite ready yet, he says).

Down the road, he says, you may even see display and other advertising on the site.

"It's a lot of real estate," he says. "We thought about it, and we even have an Excel spreadsheet that we share with investors, but it really hasn't gone any further than that."

With the launch less than a week away, Ronen says he's eager to see how the Boxee Box is received by the public, whether the lack of a Hulu app and the price of $199 offset the attraction of what he says is a breakthough device.

He says he expects Hulu to eventually relent and make content available through Hulu Plus and, while he's coy about Netflix, the fact that Vudu will be onboard is a definite plus. But the price tag?

"The fact that it costs $199 is a bummer," he says. "It would have been much better if it had cost $99."