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Samsung Acquires OTT Player Boxee

Ending weeks of speculation, Samsung confirmed last Wednesday (July 3) that it has acquired Boxee, the maker of over-the-top video streaming devices and advanced video user interfaces.

“Samsung has acquired key talent and assets from Boxee,” a Samsung spokesperson said in a statement to Multichannel News. “This will help us continue to improve the overall user experience across our connected devices.”

In addition to connected TVs, possible ports of entry for Boxee’s user interface on the Samsung product lineup include Blu-ray Disc players and a new retail CableCard device in the works that will combine cable subscription-TV services with over-the-top video.

Samsung declined to provide financial terms of the deal, but published reports on July 3 put it at “tens of millions of dollars,” but less than the $28.5 million Boxee has raised since it was founded in 2007. Another report said Samsung will take on Boxee’s workforce of roughly 40 employees. Boxee, which is headquartered in New York and operates R&D from Tel Aviv, Israel, declined to comment.

Confirmation of the deal came about two weeks after Boxee was rumored to be seeking a fresh $30 million round of funding or was close to securing a buyer. Boxee has not released any product shipment figures lately, but the company has struggled to achieve the kind of sales volumes seen by Roku, which has shipped more than 4 million devices in the U.S. Last April, Boxee revealed that there were 200,000 users of the original Boxee Box.

The original Boxee Box and the new Boxee Cloud DVR are made by D-Link, which makes Samsung somewhat of a surprise suitor.

Samsung’s acquisition came as the relationship between Boxee and the cable industry was beginning to warm. Although neither Boxee product uses a CableCard, its $99 Boxee Cloud DVR is now capable of receiving an encrypted version of Comcast’s basic digital video tier via a new type of Ethernet-connected Digital Transport Adapter.

A new set of basic-TV encryption rules handed down by the Federal Communications Commission last year has also paved the way for IP-based retail devices (like Boxee’s) to receive basic TV tiers without a CableCard from several other major MSOs, including Time Warner Cable, Cox Communications, Charter Communications, Cablevision Systems, and Bright House Networks.

Samsung’s comments about Boxee’s role after the acquisition casts some doubt on whether Samsung intends to maintain Boxee’s focus on hardware. However, the Boxee UI could be a good fit for Samsung’s Smart Media Player, a CableCard-based retail device in development that will match subscription cable TV with over-the-top fare from the likes of Netflix and Vudu and make them accessible via a unified interface. Samsung plans to release the device to retail partners by the end of the summer, according to a May FCC filing.

Samsung has also become a force in the U.S. cable set-top box market, counting Time Warner Cable, Bright House Networks and Cablevision Systems as key customers. The CE maker also has deals in place to support authenticated TV Everywhere apps from Comcast and TWC on its new line of smart TVs.

TWC, for example, will offer about 5,000 video-on-demand titles on Samsung TVs (2012 models and newer) later this summer, with plans to offer live-TV streaming by the end of 2013.

TAKEAWAY

In purchasing Boxee, CE giant Samsung gains the firm’s “key talent and assets” — including its user interface.