Boxee Wants to Enlist TV Pirates to Grow Hulu’s Audience

Forget filters, DRM and locked-down set-top boxes. The makers of the open-source media center Boxee have a novel approach aimed at getting people to watch TV from legitimate sources. The idea behind it is not to punish pirates, but to instead use them as taste makers that could drive others to Hulu, Joost and similar streaming media web sites.

I sat down with Boxee’s head of products, Dave Mathews, at the DCIA’s P2P and Video conference a few days ago. Boxee has been enjoying a busy month, issuing a major announcement almost every week. First it was unveiled that Boxee is now running on the Apple TV platform. Then Hulu came to Boxee, and most recently, the Boxee team won the CES i-stage competition, earning not only $50,000 but a booth at the next CES in Las Vegas. Boxee won the award, in part, because of its social features, which could help turn potential pirates into Hulu users.

Boxee, which is in the process of trying to raise a Series A round of funding of an undisclosed amount, is touting itself as a social media center, but the true meaning of that moniker really becomes clear when it comes to sharing content. The Boxee software includes a BitTorrent client, but Mathews told me that the system only lists legal torrents. Still, many users will probably have gigabytes of pirated content on their hard drives, and quite a few of them will get new TV shows’ episodes from sites like The Pirate Bay or Mininova.

Boxee plays any content, no matter where it’s from. It does, however, try to identify each video through a combination of keywords, metadata analysis, and video fingerprinting, and it makes use of various social features to communicate what Boxee users are watching, provided they want to share their media consumption habits. Boxee users can befriend and see what one another is doing on the platform through Facebook-like activity feeds; the system can also publish users’ recommendations and viewing habits via Twitter, Friendfeed and Tumblr. A Facebook integration is also in the works.

What it won’t do is reveal that you just watched a torrented file like Heroes.S03E07.HDTV.XviD-LOL.avi. Instead, it will link to the episode in question on Hulu. “We identify the content, and we identify a legitimate location on the Internet for it,” explained Mathews. “So an illegal downloader watches a torrent, his friends will see the legitimate stream with commercials from Hulu or CBS…or whoever our partners may be that host that video.”

Granted, Hulu and CBS streams come with commercials, whereas BitTorrent downloads are usually completely commercial-free. Mathews, however, doesn’t think this will stop users from clicking through to a Hulu video. “Typically P2P has had a bad name,” he told me. “We think we can use the alpha geeks that go out and create these torrents, and their friends, which just want an easier experience, will be able to watch commerciable streams. They won’t go to another computer and download a torrent. If we can send you to a Hulu stream of that immediately, that means there is no waiting, buffering, it just starts playing.”

That does sound great, but what’s in it for Boxee? The company eventually wants to strike affiliate agreements to get a few cents of every advertising dollar Hulu and other content platforms make from showing its videos on Boxee. There are no such agreements in place right now, and it seems like getting them will require some major arm-wrestling, especially since Boxee currently needs Hulu more than the other way around.

But Boxee has already made some progress. Joost has agreed to let Boxee use its content, and the struggling video service might be more willing to share its ad revenue in order to increase its user base than a market leader like Hulu.

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