Internet TV continued to mature in December as Boxee unveiled the Boxee beta and a Boxee-branded set top box. Meanwhile, the FCC may take another look at cable set-top boxes amidst concerns of a continued monopoly and anti-competitive business practices.

Boxee

At an event in Brooklyn last week, Boxee showcased their newest beta software, currently available to early subscribers on the way to a full public beta release on January 7th. The basic idea behind Boxee is to maximize user choice in what to watch, how to watch it, and when. Boxees pulls a broad spectrum of content into a managable and customizable interface, aggregating from various internet sources and personal media collections. Along with the beta, Boxee announced a partnership with D-Link to manufacture the Boxee Box, a dedicated hardware device, expected to hit stores next year. Boxee is expected to license its software to various other consumer electronics device manufacturers as well.

The maturation of Internet TV software like Boxee signals a shift to a more distributed media environment. However, bridging the gap between television and online media is a difficult proposition, not least because traditional content producers are slow to embrace these services. Boxee has tried to bring shows from Hulu into the service, but—as Brad Stone writes—”[the] networks do not want people to receive the Web videos on their TVs, instead of watching actual broadcasts, which carry more valuable advertising. As a result, Hulu has largely blocked Boxee from adding its videos.” There remains a slightly less elegant workaround to view Hulu content through Boxee’s web browser, but the active blocking of clients like Boxee is indicative of the hurdles in this emerging market.

In the wake of the proposed NBC/Comcast merger, and a renewed commitment by the FCC to re-examine competition and innovation in the industry, the tension between content producers and firms like Boxee will likely continue to grow. Cable companies have long enjoyed a practical monopoly on the way subscribers are able to access content, and there is no competitive market for cable boxes. Marvin Ammori of Free Press does an excellent job outlining the numerous cable industry techniques to potentially slow the transition to open internet based television alternatives. A new wave of competition makes it more likely for consumers to cut the cord—and their subscriptions—to cable.

The relationship between internet and cable service providers, content owners, and innovative start-ups like Boxee will be interesting to watch in 2010. If these disruptive technologies can successfully penetrate the market, and the FCC solidifies steps toward net neutrality and against the cable lobby, we could see a shift in how people watch TV. We could also see a shift in the kind of content they choose to watch. While “traditional” TV still accounts for 99% of all video viewing in the U.S., the popularity of services like Boxee could be a boon to independent and web-centric producers.