Boxee to Bow in Set-Top Form; Roku Readies Expanded Content Store

Klein declined to identify Boxee’s CE partner. Boxee has said its software requires “tens of megabytes” to store in a CE device and that it would first go after Internet- enabled TVs, videogames consoles and AppleTV (CED Oct 6 p6). In addition to content agreements with MLB.com and Joost, Boxee started a program in the spring that has since attracted 100 developers who have created 300 applications. “We need to find a way for our content providers, who are very nervous about partnering with us, to distribute their programming in a way that makes money,” Klein said.

The new partnership comes as Boxee prepares to release a new version of its software that will allow for searches of TV shows and other content available through the service. There will be additional software releases before the set-top version is available, Klein said. The first agreement won’t be exclusive as “everyone knew from the beginning that our interest would to be on as many devices as possible,” he said.

While Roku has forged partnerships with telcos - Qwest offered its SD player free with a new purchase of its Connect Platinum high-speed service - it also will expand its Roku Channel Store late this month, spokesman Brian Jaquet said. Roku has existing agreements with Amazon Video on Demand, MLB.TV and Netflix, and will add Flickr, Pandora, Mediafly, MotionBox, TWiT TV and Revision3. Within “a few weeks” of expanding Roku Channel Store, a free public version of its software development kit will be released to enable development of new Linux-based applications, Jaquet said.

As Roku expands its Channel Store, it also will continue to market players that start at $79 for an SD model, Jaquet said. There will continue to be growth in Roku’s hardware sales for some time since Internet-enabled CE devices are in their infancy, he said. “Our bread and butter right now is a box sale, but over time when embedded becomes more important we'll start to do a lot of software integration and services that allow for search and discovery,” Jaquet said. “We're not religious about our hardware platform, but we think it is the best way to go to market right now. We're making money off of it, but over time we see driving up the value of the product while driving down the price and making it more valuable for content out there. I think we have a long ramp of hardware still.”

Despite the increased availability, Internet-enabled TVs and Blu-ray players won’t be big sellers this holiday season, said retailers and manufacturers we polled. Part of the reason for low expectations is that consumers need to be made aware of the feature, including demonstrating them on the retail floor, said Steve Caldero, chief operating officer at Ken Crane’s Home Entertainment. With manufacturers increasingly moving to add wireless capability to TVs, retailers need to set in-store networks to demonstrate the technology, he said. “I don’t think anyone, us included, is doing a great job demonstrating the products yet,” Caldero said. “The download capabilities and widgets are getting some attention from consumers, but the awareness remains low and we need to do a better job educating them.” Until the benefit of having Internet-connected CE products is fully explained to consumers, Roku players and similar products will “have a pretty good runway,” Jaquet said.

Underscoring the lowered expectations for sales of Internet-enabled TVs is Vizio’s apparent decision to postpone to January from December delivery of its 55-, 47- and 42-inch LCD TVs with its Vizio Internet Apps (VIP) platform (CED Sept 22 p3). Matthew McRae, vice president and general manager at Vizio, said at the NewTeeVee conference in San Francisco last week that performance of the VIP TVs is “still a challenge,” but it will get better. (See the separate report in this issue.)

BMO Capital Markets Conference Notebook …

Demand for the 120-GB and 250-GB PS3 consoles, as well as the PS2, will likely outstrip supplies this holiday season in the U.S., Phil Rosenberg, Sony Computer Entertainment America senior vice president of strategic business development, told Consumer Electronics Daily. “PS2 we're pretty much out of,” he said. He predicted the company would have enough PSP-3000 and PSPgo handheld systems to meet demand. The black PSPgo “is outselling the white right out of the gate,” he said. Until systems sell through it’s hard to tell for sure what will happen, he said, but “right now, the way the numbers are lining up, demand seems to be outstripping” supplies for the PS3 and PS2. The 250-GB PS3 went on sale last week in the United States at $349.99, $50 more than the 120-GB SKU. The two PS3 SKUs were in stock at Amazon.com, BestBuy.com and GameStop.com, as well as at various Best Buy and GameStop stores in Long Island and Manhattan that we checked online, Friday. But while the PS2 was available for online purchase at BestBuy.com, Best Buy stores in Levittown and Baldwin, N.Y., and one of its five Manhattan stores, were out of stock on it.

----

OnLive will likely provide the MicroConsole at no charge for subscribers to its coming on-demand cloud game platform (CED March 26 p9), CEO Steve Perlman told the conference. The MicroConsole will allow subscribers to play games on their TVs without using a computer. It’s “so inexpensive” to manufacture the device “we can give it away for free if we'd like to,” he said. The company hasn’t said how much the subscription will cost for access to the service. Consumers will also have to pay for each game, with pricing on each title to be set by the publisher, Perlman said. In addition to the subscription fee and revenue sharing with publishers that will be done when content is sold, Perlman said revenue sharing with the publishers on game ads is also planned. It’s possible that the subscription fee will eventually be dropped, he said, but there will be no ad-supported games initially. The company is looking to make sure that it’s not labeled “a back catalog service,” so the goal is to make as many new releases as possible available via the service, he said. The intention is to get multi-platform games within the same availability window as the PC game SKU, Perlman said, noting the PC versions of games tend to be released after console SKUs. OnLive will compete against Microsoft, Nintendo and Sony, but several third-party publishers who make games for the consoles, including Electronic Arts, Take- Two Interactive, THQ and Ubisoft, have announced plans to support OnLive. The service is in external beta test and launch is on track for this winter, he said. “We've already had hundreds of thousands of people sign up for” the beta, he said. There will be five U.S. data centers running at launch to back the service, in Atlanta, the Bay Area, Chicago, Dallas and Washington, D.C., he said. Availability outside the United States is still planned after the U.S., at an unspecified date, he said. A planned demonstration of the service using a computer and large screen couldn’t be done Thursday due to what Perlman said was an inability to get Internet access. He did, however, provide a demo of the service using an iPhone. While the service will work on mobile phones, he stressed that the service is intended to be for computers and TVs.