Josh Braun’s Blog // I have it written down somewhere . . .

NewTeeVee has a nice roundup of stats surrounding various set-top box products

The total number of Boxee Box users is around 200,000…still in line with an industry-wide trend: Smart TV set-top boxes haven’t reached a wider audience, and sales have often been below expectations. … [T]here are less than one million Google TV devices being used in people’s households. Roku recently fell short of its own goal to sell three million boxes, instead selling 2.5 million devices in three years, despite a recent massive marketing campaign. The only company able to move higher numbers has been Apple. The company revealed in January that it has sold 4.2 million Apple TVs.

The NewTeeVee story, from Janko Roettgers, paints the numbers as a disappointment for Boxee, but whether that’s the case is an interesting question.

While Boxee may have sold only 200,000 boxes, it has a total user base of 2 million when you count the users of its other non-flagship devices and the now-moribund desktop version of its software.  In particular, a lot more people are using the free desktop application—even at this late stage—than buying the dedicated Boxee hardware.

This result isn’t surprising if you look at Boxee’s initial two-step business strategy, which was to (1) make it’s interface as popular as possible by disseminating it for free to users who wanted to turn their ordinary computers into HTPCs, and then (2) turn around and use this hopefully loyal audience to convince consumer electronics manufacturers and content providers to use its platform.  By this metric, Boxee managed to convert around 10 percent of its audience to “paid” customers who bought the set-top box—perhaps a bit more, if we assume a handful of those users a Boxee-powered device other than the flagship box.  And while I’m not an economist, this probably isn’t a terrible figure, considering that this all occurred during a period when Americans had a rather meager expendable income to drop $200 on a  set-top box.

Of course, by removing the availability of its free desktop software, Boxee may be killing the goose that laid the golden copper egg.  No longer will users be able to try the interface out for free before deciding to buy.  And the Boxee Box is sold primarily through Amazon, which further limits the ability of prospective customers to try it before they buy it.  The upside here, for Boxee, is that it no longer has to offer multi-platform support for its software (which was available on Windows, Linux, and OS X in addition to the set-top box).

Related, and perhaps more important to Boxee, it can appease content providers, who demanded heightened security features be built into the set-top version of the software that conflicted with those built into the partially open-source and highly user-modifiable desktop version of the software.  This meant that cross-platform support became an even tougher proposition, since the technical specifications of the desktop and set-top versions of the application would begin diverging over time.

The tradeoff is a clear one: selling a set-top box is a one-time proposition.  Once those boxes are sold, if you want to continue making money off the customers, you have to continue selling them services and subscriptions—and hence, Boxee figured, it had to appease the content providers behind those subscription services.  Whether Boxee can continue to sustain itself and grow its user base without the exposure and word of mouth that the desktop software provided is an interesting and open question.  Two-hundred thousand purchasing users may not seem like a lot by the entertainment industry’s standards, but supporting two million non-paying users indefinitely isn’t necessarily a sustainable business model either (though numerous counterarguments could be made here, that’s another post).

In the meantime, game systems may end up owning this market—there are, after all, 66 million Xbox 360 units in the wild right now, dwarfing even moderately successful products like the Apple TV.  And as Cory Bergman notes, those Xboxes are now used even more often for music and video than for gaming.  Plus, while Microsoft is doing a handy business here and has an excellent interface, Sony’s PlayStation and Nintendo’s Wii probably also have respectable figures when it comes to their use for non-gaming content.

What’s more, gaming boxes like the Xbox and the Wii are helping to push the envelope when it comes to the sort of “ten-foot interface” design that’s necessary to comfortably use a set-top device from your couch.  As many commentators noted earlier this year while perusing various voice- and gesture-controlled television devices appearing at CES, one of the most frustrating aspects of using an internet-connected TV has been the fact that you so frequently have to type—to log into services, to execute searches, and so forth—on keyboards that are either microscopic or not designed for text-entry at all.

As usual, though, this has a lot more to do with the complex socio-technical system arrayed around the way we watch television, than with gadgetry by itself.  Gadgets are artifacts with politics.  As Daniel Chamberlain has argued, the values and politics of many actors are “invested and contested” in the design of the various knobs and twiddly bits that make up our connected television interfaces.

And with so many companies (and users) out there, all with different levers they can pull, it’s going to be interesting to see where this goes.

[Image Credits: Boxee remote by Boxee.tv; Xbox 360 image by Microsoft; Cross-posted to Hacktivision]