Aereo, Boxee bring antennas into the online video spotlight

By Mariko Hewer

In the technology industry, words like "newer," "faster" and "smarter" tend to dominate the space, so much so that we often forget the benefits of the technology we were using before our current gadgets. These benefits may have been omitted from more recent versions of technology for a variety of reasons such as design or cost. But two nascent companies, Aereo and Boxee, are encouraging online video viewers to take another look at a time-tested technology: antennas.

"Hundreds of thousands" of Aereo antennas can fit in a single room. (Source: Aereo)

Though both enterprises are employing antennas in their products, they are doing so in notably different ways. New York City-based Aereo lets consumers rent antennas stored in a main data center on a daily or monthly basis; these antennas then capture content streaming over public airwaves and transmit them to the consumer's device, whether remote or in-home. Living-room startup Boxee, on the other hand, markets a set-top box with a digital attachment that allows users to stream TV content live.

Formed in 2007, "Boxee started out as a free software download," says Liz Dellheim, public relations manager at Boxee. "We've really sort of evolved since then, so we came up with the first of our products, the Boxee box. It's a hardware device built for our software, a media streaming service."

But the Boxee box isn't just a piece of hardware to complement the company's software. It's also compatible with an add-on antenna which attaches to one of the box's USB ports and allows users to stream TV over public airwaves.

"We really saw as our product became appealing to the mainstream audience, [that] although there's a lot of great stuff on the Internet, there's so much valuable content that was live TV," Dellheim says. "As we were continuing to be in the space, we really saw that the blend [of Internet and live TV] made sense. Things that never make it on to the Internet are intended to be watched live."

Boxee's antenna attachment appeals to a subset of consumers called "cord cutters," viewers who still want to watch live and recorded TV but do not want to have to connect to a cable box or buy a cable package. In addition, low-cost monthly services such as Netflix (Nasdaq: NFLX), Hulu Plus and Amazon (Nasdaq: AMZN) Prime offer these cord cutters huge libraries of content--albeit much of it weeks or months old--that cost far less than the average monthly cable bill.

A Boxee box with the antenna attachment may be the right choice for a viewer who wants basic over-the-air programming and is willing to wait a while to watch more exclusive content such as the newest season of "The Office" or "American Horror Story." And to sweeten the deal, services like Netflix are now offering original content--whole series available immediately upon release to their subscribers.

In its latest hardware addition, Boxee has created the Boxee TV, also adding new software in the form of a cloud DVR that allows users to store their recorded programs on the Internet. "This box still has Internet apps and still does local file playback [but] we really are moving away from that because our whole sort of concept is we believe local storage is something of the past," says Dellheim. "We think cloud storage just makes so much sense."

Boxee's antenna attaches to a USB port and allows viewers to stream over-the-air content. (Source: Boxee)

The Boxee TV has garnered positive attention for its low price and unlimited cloud DVR recording capabilities, though there have been some critical reviews as well. VentureBeat's Devindra Hardawar, for example, recently complained that Boxee is trying so hard to be innovative with its new products that they've "failed to get the basics right." He added that "[t]he cloud DVR lacks simple features, like scheduling a recording from the channel guide. The remote is a nightmare. And it crashes, a lot."

Nevertheless, Boxee isn't slowing down. Dellheim says the company is working on a new software update which will soon be released and that it plays on expanding into 30 markets by the end of 2013 (it is currently available in eight).

Aereo may likely be a competitor in some of those markets. The company, which hopes to expand into 22 more markets this year, houses "tons" of antennas in a data center and rents them to users for $1 daily or $8 monthly; those users can then capture over-the-air content and watch it on any device they choose as well as record it for later viewing.

Unlike Boxee, however, Aereo faces greater challenges than reviewers who judge that its products are clunky or hard to use (it doesn't distribute any hardware to judge). Instead, from the moment of its rollout, Aereo has faced two lawsuits filed by stations affiliated with several broadcasters alleging the service infringes on their copyrights. A federal court recently struck down a preliminary injunction filed by the broadcasters against Aereo, allowing the service to continue renting its antennas, but the battle may continue in other markets if Aereo does continue to expand.

An Aereo spokeswoman said the company does not comment on the ongoing lawsuits and was also unable to elaborate on the technology behind the streaming service. 

Dellheim explained the legal terms between Boxee and Aereo. "The difference between [the two services] is our device is based in the home, and instead of storing it on our local hard drive that's built on our DVR, we're just storing it on the cloud. Because we are in the home, we don't have any kind of master copy."

Broadcasters allege, on the other hand, that Aereo is creating just such a master copy by using a centralized data center to cull and record over-the-air content. They contend that this master copy would violate the Copyright Act and that Aereo should either be forced to pay retransmission fees or should be shut down.

Aereo doesn't seem too intimidated yet, though. In February, Jeff Roberts at paidContent reported that the service "has expanded from New York City to 29 counties across New Jersey, Pennsylvania and Connecticut," adding that "[t]he company is also kicking off a major billboard campaign in the New York area," suggesting it plans to go ahead with its expansion plans despite any legal troubles.

A few short years ago, it might have seemed unlikely that a company--let alone more than one--could bring antennas back into the spotlight of the video industry, whether for TV or online content. Yet that is exactly what Boxee and Aereo have done, the first through an in-home antenna attachment, the second through rentable antennas housed in a central data warehouse. Despite some negative press and litigation, Boxee and Aereo are poised to push forward into the online video and video-on-demand space--with other companies likely to follow in their newly-forged footsteps.

Aereo, Boxee bring antennas into the online video spotlight