Yesterday, over-the-top Internet set-top box maker Boxee confirmed that it had been acquired by Samsung. The rumored acquisition price was around $30 million--about the same amount as the company raised in venture financing, meaning that at best, investors got their money back. According to VentureBeat, Boxee will continue to support owners of Boxee Box and Boxee TV devices "for the immediate future," but Boxee's Cloud DVR service will be discontinued on July 10th and recorded television shows will be deleted.
Samsung has been one of the biggest potential customers for set-top box technology companies such as Google and Roku. Now, it's very likely that Samsung will integrate Boxee's technology into future HDTVs, Blu-Ray players and other devices. For Roku in particular, the number of companies that are both likely to integrate its technology into their devices and are big enough to represent a major business opportunity are dwindling. Sony and Vizio are already Google licensees, and Samsung is now on board with Boxee. Panasonic, Sharp and LG are still in play, but beyond them, the remaining players are second- and third-tier brands.
I'm still not convinced that there's a broad market for standalone Internet set-top boxes. Boxee couldn't find one, Google's licensees are struggling, Apple TV is supposedly beyond the "hobby" stage (but not far beyond) and Roku is putting more emphasis on its "streaming stick" and software licensing deals than its set-top boxes. As much as I like the idea of over-the-top video, unless Apple or Intel can come up with something both revolutionary and highly desirable, Internet video will remain a "second screen" application for PCs, tablets and smartphones.
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