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Can Boxee overcome its parasitic reliance on Hulu's content?
Source: Flickr user JamesJordan

One can only imagine the collective eye-roll at Boxee headquarters last week when news of Hulu Desktop broke. After all, when Hulu cut off Boxee, it forced the upstart to resort to guerilla tactics in order to get Hulu content working again. And now, a couple months and box-outs later, Hulu has its “desktop app” that — with its 10-foot UI and remote-control support — is clearly destined beyond the desktop.

While it’s annoying to those who have fallen in love with the Wonder Twins power combo of Boxee’s software and Hulu’s content, the reality is its hard to make a good life for oneself as a parasite without a host, and currently there is no doubt that Boxee is a parasitic application. In other words, its an app that draws its sustenance from a larger life force (read Hulu) — one that doesn’t particularly enjoy pests buzzing about its head. So what should Boxee do?

In short, Boxee needs to embrace its roots and look to the Internet — not big media — to find its hits.

It won’t be easy, particularly when Hulu’s content providers like SNL generate the web’s biggest viral traffic. But as we’ve watched the Internet video market mature over the past year, it’s become clear that, unlike early, unsuccessful attempts by Internet giants such as Yahoo, independent voices are the ones succeeding in an end-run around the Hollywood studio system to the consumer.

These good independents — lots of them — would work with Boxee, especially if the app builds on its reputation as a market-leading social-TV application. By setting itself apart in social TV — including evolving to two-way interaction on Twitter and Facebook from within Boxee — it would be a natural application for content created for Internet distribution.

A focus on social TV would grow Boxee’s user base, which could solve Boxee’s bigger problem: lack of a clear monetization model. Today, Boxee lives off of big-media ad-supported content like Hulu, but by focusing on independents, it could start selling advertising to grow revenue. Additionally, it could add premium features or even work with content aggregators such as Netflix to add to its revenue stream.

Lastly, Boxee should explore licensing its software to set-top box and consumer electronics makers. As a FiOS user appalled at the set-top’s clunky user experience, I cringe when I hear about Verizon’s plan to incorporate social TV widgets. While it’s unlikely to happen, Boxee on FiOS would almost certainly be a much better social TV experience than Verizon could ever dream of.  And if a stodgy telco won’t take Boxee, I’m sure there are others that will.

It’s no doubt a difficult road, but Boxee needs to evolve away from its over-reliance on Hulu. Otherwise, the mosquito may get swatted one too many times by the horsetail of big media.

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