Akimbo Changes Course, Switches Off Boxes

Akimbo is discontinuing its hardware product line, and instead will focus on selling content services. Starting tomorrow, Akimbo is no longer going to sell the box, and will offer discounts and refunds to some of the existing box owners.

In addition to putting its box to sleep, the company is also going to announce a consumer-centric website on Monday, including a video discovery service that will allow consumers to buy and peruse content. There are no plans for taking an ad-supported business approach for now, instead selling services for PCs and other manufacturers’ set-top boxes.

This is a big gamble for 3-year-old-Akimbo, which had raised over $27 million in funding from big name VCs like Kleiner Perkins and Draper Fisher Jurvetson. The company’s box failed to make much of an impression on folks like David Pogue of The New York Times. “For us, the Akimbo Box was the Trojan horse, as a way for us to engage others,” said Thomas Frank, CEO & President of Akimbo in a chat with NewTeeVee.

Akimbo recently made its Internet-based video-on-demand service available on Windows PCs, and the company is working with other hardware vendors to port its service to their platform.

The PC launch raised some eyebrows. On his blog, Joesph Lazlo of Jupiter Research said, “It marks a big change of strategy for them — and of course strategies tend to change more often when they’re failing than when they’re working.”

“We simply want to be in everyone’s box,” says Frank. “When you think of Internet video on demand, we want you to think Akimbo. I think you will see that others will follow the same path.” Frank, who recently joined the company as CEO, feels that there is little room for standalone boxes, and is of the opinion that consumers are more likely to opt for a multipurpose box.

Investor AT&T’s Home Zone set-top box, for example. Cisco, another investor, has made no bones about its consumer electronics ambitions and could easily bundle Akimbo with Linksys and Kiss product offerings, though apparently there are not plans for that yet. Akimbo’s device-neutral strategy could help the company get partners such as D-Link and NetGear. What about Apple TV? “I could see them as a partner, but meanwhile there are other boxes,” Frank said.

Given the buzz around Joost, one has to wonder if that is one of the factors leading up to the abandonment of hardware. Frank attested this is not the case. “Joost is about adding contextual ads over video content, while Apple is all about Apple services. We are playing neutral in that aspect, and our content service is not pinned on ads,” he said.

My biggest concern is that company’s user base might feel a little cheated. I asked Frank, aren’t you leaving them high and dry? “It’s a risk, and the simple truth is that we wrestled with this for a long time,” he acknowledged. In order to make up for the pain caused by its strategic shift, Akimbo is going to offer its subscribers three months free service before switching off the boxes, and will issue refunds on some of the recent purchases. Akimbo users will get credit towards other services as well.

Nevertheless, I think Akimbo’s decision is going to make a lot of mainstream users pause before going the indie hardware route.