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Wal-Mart to Sell Boxee TVs Challenging Apple and Roku

In a coup for New York-based startup Boxee Inc., Wal-Mart Stores Inc. (WMT) will sell and promote its new Web-connected device that brings live television and online video together, the companies said.

Starting tomorrow, the world’s biggest retailer will exclusively sell the new $98 product, called Boxee TV, in more than 3,000 U.S. locations during the holiday season. Wal-Mart will set up displays and send out marketing materials for the device, a small black box with a remote control that can access free TV broadcast channels as well as Internet content.

Boxee and other set-top device makers including Apple Inc. (AAPL) and Roku Inc. are competing for consumers of Web-based entertainment, such as YouTube videos, Netflix Inc. (NFLX)’s movies and Pandora Media Inc. (P)’s online radio service. They are also trying to lure users seeking an alternative to cable and satellite TV services.

“It’s going to be a big launch for us,” Avner Ronen, Boxee’s chief executive officer, said in an interview. “There’s a big difference between having your product being carried by retailers, where it sits on the shelf, and getting real marketing behind it.”

Holiday shoppers are being presented with an array of new electronics products, from computers, tablets and phones to software and services from Apple, Microsoft Corp. and Google Inc. Boxee, a 5-year-old venture-backed company, has struggled to compete with Apple and closely held Roku.

Channel Surfing

Last year, Boxee sold 120,000 of its devices, which are manufactured by D-Link Corp. (2332), while Roku sold 1.4 million, according to Jordan Selburn, an analyst for research firm IHS ISuppli. Apple said last week that the company sold 5.3 million Apple TV devices in the past 12 months. Roku’s devices range in price from $50 to $100, while Apple TV sells for $99.

Consumers haven’t flocked to these devices because they don’t have many of the shows offered on cable networks, Selburn said. That’s not expected to change any time soon as broadcasters and pay-TV operators look to protect their lucrative businesses, he said.

“The content owners are just far too reluctant to support streaming or downloaded access to their content,” Selburn said.

Boxee TV is a compelling option because it pulls in broadcast channels and Internet video into a single system, Ronen said. The device, which has a built-in antenna for accessing over-the-air TV signals, shows TV channels when it boots up, unlike services that typically ask users to navigate menus at the outset to decide what to watch.

“You turn on the TV, and it’s a familiar ground,” Ronen said. “We don’t believe the future of the TV is going to be a future filled with apps. When you turn on the TV, you don’t want 60 icons. You just want to watch something.”

Included in Boxee TV is a service called No Limits DVR, which lets customers record unlimited broadcast TV shows to the cloud and access them from the set-top box or from a computer, smartphone or tablet. It will be available in about eight of the largest U.S. cities to start, Ronen said.

To contact the reporter on this story: Mark Milian in San Francisco at mmilian@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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