The archive · Hardware & Devices · Strategic decision · 2008–2013
Boxee sells to Samsung for ~$30M after betting on streaming hardware
Boxee moved from media-center software to streaming hardware and a cloud DVR, then sold to Samsung in July 2013 for around $30 million.
Boxee
What the business is
Boxee is an Israeli- and New York-based streaming media and entertainment startup that began as media-center software and moved into hardware: the D-Link-made Boxee Box, then the $99 Walmart-exclusive Boxee TV with cloud DVR recording of over-the-air HD channels.
Starting capital：$26.5M total funding before the acquisition, per TechCrunch.
How it started
Boxee began as a provider of media-center software (its HTPC software shipped in 2008), then pushed into hardware: the D-Link-made Boxee Box arrived in 2010, and by late 2012 the company had shifted development to the Boxee TV, a $99 streaming box sold exclusively through Walmart with cloud DVR recording of over-the-air HD channels, initially available in a few US markets and rolling out through 2013.
What happened
The company dropped active updates for the older Boxee Box to focus on the new line, disappointing longtime users, while a March 2013 firmware update added Vudu 3D content, DLNA streaming and on-device DVR management. In early July 2013, Israeli outlets The Marker and Calcalist reported a Samsung acquisition with conflicting prices; TechCrunch's sources confirmed the deal at around $30 million as CEO Avner Ronen said the company could not comment.
How it ended up
Samsung confirmed to the New York Times that it had acquired key talent and assets from Boxee, and Boxee then confirmed the acquisition to TechCrunch. The deal brought the whole team of around 45 people under Samsung's roof, and TechCrunch noted a price near the $26.5 million raised was not good given Boxee's hardware focus; the fate of the standalone Boxee line and Cloud DVR was left in question.
Background
Boxee is an Israeli- and New York-based streaming media startup that began as media-center software for watching internet video on a TV. Its bet was that the same audience would carry a hardware business: first the D-Link-made Boxee Box, then the Boxee TV, a $99 Walmart-exclusive streaming box with cloud DVR recording of over-the-air HD channels.
The arc ran from software to hardware to an exit. Boxee's HTPC software shipped in 2008 and the Boxee Box followed in 2010, and by October 2012 the company had shifted its limited resources to the Boxee TV, stopping active development on the older Boxee Box and disappointing long-time users. A March 2013 update kept adding to the new line — Vudu 3D, DLNA streaming, on-device DVR management — as the cloud DVR rolled out across US markets.
In early July 2013 Israeli outlets The Marker and Calcalist reported that Samsung was buying Boxee, with conflicting prices; TechCrunch's sources confirmed the deal at around $30 million. Samsung told the New York Times it had acquired key talent and assets from Boxee, the whole team of about 45 moved under Samsung's roof, and TechCrunch judged the price unimpressive against the $26.5 million Boxee had raised for its hardware push.
What has to be true
- Free media-center software earned enthusiasts but not a sustainable business, so Boxee had to ship hardware — first the Boxee Box, then the Boxee TV — to have revenue at all.
- Each generation abandoned the previous one, trading user trust for the next hardware bet: the Boxee Box replaced the HTPC software, and the Boxee TV replaced the Boxee Box.
- Streaming-hardware economics are brutal: a $99 box needs retail scale and content relationships, which a small startup could not assemble against Roku, Apple TV and content incumbents.
- Samsung's price of around $30 million, near the $26.5 million raised, showed the value was the streaming team for Smart TVs — not the standalone hardware business.
What can be applied
A software following does not carry a hardware business: when the exit lands near total funding, the pivot premium never materialized — retail reach and content deals set streaming-hardware value.
Aftermath
As of 2013-07-03 the acquisition was confirmed: Samsung said it had acquired key talent and assets from Boxee, TechCrunch reported the price at around $30 million, and the ~45-person team moved under Samsung's roof. Samsung was expected to point the team at its own connected-TV and device software; Boxee's future product plans, and whether the standalone Boxee Box and Cloud DVR would keep support, had not been announced.
Sources
- Streaming Entertainment Startup Boxee Acquired By Samsung For Around $30M
- The Boxee TV Offers Unlimited DVR Storage, Dual Tuners, And Netflix For $99 (And $15/Month For The DVR)
- Boxee Acquired By Samsung For Around $30M
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