Samsung Acquires Boxee for Reported $30 Million

Deal to Improve Device Maker's Connected TV Play

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The founders of Boxee had an audacious goal: disrupt the TV ecosystem by creating a beautiful interface that blended TV and the web. But they also had a problem: They didn't have the scale or the clout to distrupt the cable and satellite bundlers that dominate pay TV in the U.S.

Enter Samsung, the Korean electronics giant, the world's biggest maker of TVs and a company with its own ambitions to create a smart TV ecosystem that would control the living room.

Boxee's Cloud DVR
Boxee's Cloud DVR

AllThingsD reported last month on Boxee's attempts to raise funds or find a buyer. On Wednesday Samsung confirmed a report in Israeli publication The Marker that it had become that buyer.

"Samsung has acquired key talent and assets from Boxee," a Samsung spokesperson said. "This will help us continue to improve the overall user experience across our connected devices." Andrew Kippen, VP-marketing at Boxee, declined to comment. The Marker pegged the value of the deal at roughly $30 million, which would at least recoup the investors that had put that much into the company since it was founded in 2008.

Boxee, which rolled out a cloud DVR service earlier this year, may well help Samsung better contend with an increasingly competitive connected TV marketplace, as well as provide an amazing user interface, something that has proven a challenge for cable and consumer electronics companies to develop on their own.

Boxee is renowned for its video search capabilities, an essential function for company trying to build an all-in-one entertainment streaming service that compiles video from sources as varied as YouTube, Hulu, Netflix, Amazon and linear TV. Google tried that approach with its Google TV, but its effort languished in the absence of deals with key TV networks or cable operators. An attractive user interface with powerful search functions could further Samsung's desire to sell ads in its smart TV environment.

Boxee could also improve Samsung's mobile entertainment play. The amount of video views from smartphones and tablets tripled last year, according research from Adobe, yet no hardware company has really released a mobile device with a compelling video product. Samsung could make its devices more attractive by letting viewers continue viewing begun on Samsung TVs after they're on the go with Samsung smartphones or tablets.

In the end the deal adds another wrinkle to what's turning into a showdown for control of the living room among traditional satellite and cable companies, set-top approaches like Microsoft's Xbox One and Roku, yet-to-be-released offerings like Intel's planned pay TV service and whatever TV product Apple has planned, and the TV manufacturers themselves -- but mostly Samsung.