Boxee is the PC/Mac application that puts some major web and local video sources and puts them on your television. You can use Boxee to play from sources like CBS.com, Hulu, WB.com, Blip.tv, Joost, and others. Not only is it a video center but you can play your music (mp3, etc.), Last.fm radio, Pandora, and more as well. It’s essentially a media system that’s built for your TV that runs on your PC/Mac/AppleTV.

Mark Cuban had a lively debate with the Boxee founder over the future of services like this and both sides had great points but I’m afraid Cuban was the victor of this debate, despite having a terrible time debating his point. Here’s why…

Boxee is a great service that allows many people to dump cable in favor of getting their content from places like Hulu. It allows for people to get their video in an on-demand setting and that’s what more and more people are wanting. Cable companies and content providers are holding fast to their classic modes of delivery but soon will be forced to change.

The biggest similarity can be seen in the advent of Tivo and subsequently every cable/telco/sat provider’s providing DVR’s to thier customers. It’s the same situation. Tivo developed a game changing technology directly attached to the TV that changed the way we watch television. When the Cable/Telco/Sat providers saw this game changer, they started creating their own versions of Tivo. Tivo looses money every year and is struggling to survive. The problem is, is that Tivo provides the best DVR experience of which I know. TimeWarner/Comcast/Verizon/AT&T/DishNetwork/DirectTV all have decent DVR solutions, but Tivo still has the best. Tivo is only now transitioning from the current company (as it stands) to a survivable model, and that’s providing liscensed software for the previously stated companies. If I could have Tivo work seamlessly with my VerizonFIOS (no cablecard, etc.), I’d be in heaven. Tivo should have long ago started providing software to these companies.

Boxee is going to find itself in a similar situation unless it’s willing to follow the past signs and prepare for this enevitable event. I believe Boxee is providing a service that more people will want if they could easily get their hands on it. Tivo knew this, that’s why they built their own hardware. Once everyone wants it, the cabel/sat/telco companies will jump all over this and start providing this service themselves. Then Boxee dies.

How can they survive? I believe in one way only. They start figuring out how to port Boxee over to those famous Motorola boxes that make up a majority of the set-top-boxes that cable companies provide. Honestly, these boxes do Pause/Record/Playback pretty well, some of the channel guides need reworking, but that experience is pretty standard. If Boxee could handle these basic channel surfing and record functions and work on a these set-top-boxes (and it should being that most of these are Linux based), then start liscensing this tech to these providers they should be able to make a pretty penny. Then all they have to do is ensure that it runs properly on new boxes. That will keep them running.

Sat/Cable/Telco companies don’t want to employ large groups of people writing their DVR code. Boxee could usurp Tivo and become the defacto software on cable boxes. I can’t believe that these companies wouldn’t love to tell people, “If you swap to our service you’ll be using the same great system you’re currently useing. No relearning how to use your DVR.” Maybe they will write their own software, but with all the great things that Boxee offers it will be a hard job to catch up.

So can Boxee survive? As they are only in a niche group. But as a software provider no to us (as in we the end users) but to the Cable/Sat/Telco companies, they can become strong. Like Cuban said, these companies aren’t stupid, they’ll adapt…so Boxee must become the adapted solution.