Growth Matters: Boxee Brings Internet and Friends to Your TV

Some of your favorite photos, videos and songs live on your computer or on the Internet, not in your living room. But viewing or listening on the computer can be less than satisfying. And Boxee, a New York City-based startup, doesn't want your home-entertainment system to go to waste. It has developed a free, open-source software platform that allows users to tap into their hard drives -- and into the inexhaustible source of movies, television shows, music and photos known as the Internet -- from their television sets.

Essentially, Boxee integrates users' personal and Internet media, so they can listen to music and view movies, television shows and photos from their hard drives, television sets, as well as from websites like Netflix (NFLX), MLB.TV, Comedy Central, Pandora, Last.fm, and flickr, all from their computer or high-definition televisions. The technology also enables users to share information about what they're watching, or listening to, with other Boxee users or with friends on social networks like Twitter and Facebook.

Remotely Social

The idea is to create "the first 'social' media center," as Andrew Kippen, vice president of marketing, puts it. And Boxee is apparently having no trouble convincing users of its appeal. By the beginning of 2010, the company had already attracted 750,000 to 800,000 users, an eyebrow-raising jump from the 110,000 alpha testers it had at the end of 2008.

Even the initial response blew away Boxee's expectations: The company had hoped to attract 5,000 alpha testers when it launched in June of 2008. "We think we attracted so many users because there are many people who have wanted to be able to do what Boxee does for a long time," Kippen told DailyFinance.

Five friends founded Boxee in 2007. Inspired by the Xbox Media Center (now called the XBMC Media Center), which enabled users of the original Xbox to play digital media on their TVs, they became members of Xbox Media Center's open-source community and then came up with a way to take the platform further, Kippen says. Since 2007, Boxee CEO Avner Ronen and a team of 11 others have worked to expand the platform to include online sources like Hulu and Netflix, as well as social networking, he adds.

Next Task: Making Money

So far, Boxee hasn't made any money. But the company plans to generate revenue by taking a cut on sales of copyrighted content to its customers. Boxee is developing a billing platform scheduled to come out in the second half of this year, Kippen says. "If a user buys, for example, a high-definition video, such as Ileana Douglas's new show about Ikea, the billing system will take the payment from the consumer, subtract the Boxee commission, and forward the balance to the content provider," he explains.

Even after increasing its user base sevenfold in about a year, the company thinks it has a long way to grow. "We think that one in 10 Americans want to connect their laptop to their TV," he says.

Boxee plans to launch a new product, called the Boxee Box, with networking company D-Link later this year. The Boxee Box will connect TVs to the Internet without hooking them up to a computer.

Editor's note: This story has been updated to correctly reflect how and when Boxee was founded.