Akimbo set-top box brings content from Internet to TV

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Akimbo systems aims to elbow its way to the top of a new TV entertainment category this summer: content downloaded from the Internet. When the service launches in the next few months, it will offer niche programming from 48 different content partners including movie and TV sites CinemaNow, IFILM, Sail.TV and How To Web TV.

"We're really focused on niche content to get started because these are people who are completely underserved and can't get the programming they want," said Steve Shannon, Akimbo founder and exec VP-sales and marketing. "Specialized content will be the meat and potatoes of our business for the next few years. But in order to grow, we will have to have [mainstream] movies and TV shows."

Akimbo plans to sell consumers an Akimbo player, a box which sits on top of the TV and records Internet content, for $229.99. A service plan can be had for either $9.99 per month or $199.99 for a lifetime subscription. Although that model sounds similar to TiVo or ReplayTV (where Mr. Shannon was an executive), the Akimbo business differs in that its sales rely on programming, not the unique technology. "We're selling content, not the box," Mr. Shannon said.

Investors seem to believe the business model will work. Two weeks ago, venture capital firm Kleiner Perkins Caufield & Byers led an investment group that raised $12 million in second round funding. In addition, Kleiner Perkins partner William R. Hearst III joined the Akimbo board as its chairman.

Like any new consumer technology, Akimbo has a dual marketing challenge: selling the service while explaining what the technology is and how it works. For that reason, Akimbo's initial efforts will focus on education, public relations and trying to connect with early adopters and influencers.

cable competition

John Barrett, director-research, Parks Associates, said, "People who want to watch CNN, Discovery Channel and ESPN won't stream video off the Internet; they'll just go to their cable company. But if you're into films from Zimbabwe or hard-to-find content, you would be interested. ... To be fair, the cable companies know this too. They already know it's a weakness they have."

And that could be a problem for Akimbo. If bigger cable and satellite players see Akimbo succeeding, Mr. Paxton said, what's to stop them from adding Internet downloading capabilities to their own boxes? TiVo already has plans in place. In June, the company said it will add Internet downloadable capabilities to its player.

Mr. Shannon conceded that likelihood. But he believes Akimbo has a one to two-year technology lead.

Akimbo's initial goals are modest: It aims to sign up 50,000 subscribers by year-end, Mr. Shannon said.

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