Fan TV, a startup that wanted to make it easier to watch Web video — and conventional TV — on TV sets, looks like it is ready to throw in the towel.
Industry sources say the set-top-box maker has spent much of this year looking for a buyer, and a person familiar with Fan says a deal is likely to be announced this week.
Conventional wisdom among industry sources is that Fan’s investors, who put at least $40 million into different incarnations of the company over the years, will be unlikely to get all of their money back. Some sources say the company was recently looking for something in the $15 million range.
Assuming that a deal goes through with numbers like that, the logical conclusion will be that Fan failed at a tough task: Selling a stylish, affordable box that integrated Web video and pay-TV programming, without a big push from pay-TV providers or deep-pocketed consumer tech companies. I’ve asked Fan CEO Gilles BianRosa and some of his investors for comment.
Fan has a slightly confusing corporate history; it started life as a spinout from Vuze, a BitTorrent software company. For a few years, it concentrated on video “discovery” software that was supposed to help Web video watchers find their favorite shows and movies across competing platforms, like Netflix and Apple’s iTunes.
This year, operating as Fan TV, it started selling a $149 box that was supposed to replace both conventional pay TV set-top boxes and Web video boxes like Apple TV and Roku.
The idea: Using the Fan TV box and remote, co-created by design star Yves Behar, a video watcher could easily flip between Web video and stuff that came from a pay-TV provider. Right now, most boxes either provide programming from cable TV or the Web, but don’t combine them.
“This is what we have always hoped Apple TV would be,” BTIG analyst Rich Greenfield raved this summer. You can see a demo he created of the box in action at the bottom of this post.
Unlike some Web-TV boxes, Fan TV was designed to work in conjunction with pay-TV providers, not to replace them. At least in its current incarnation, the device wouldn’t work unless customers already had pay-TV subscriptions.
Fan TV launched this spring with the approval of Time Warner Cable. But the pay-TV provider, which has also worked with Web TV box maker Roku and has reportedly entertained a deal with Apple to integrate an Apple TV box into its service, didn’t seem to push Fan very heavily. Worth nothing: Comcast*, which is trying to buy Time Warner Cable, has spent heavily.
Meanwhile, most recent efforts to create standalone video-discovery software and hardware haven’t panned out. Boxee, which initially made waves with its Web video set-top box, ended up selling for a modest sum to Samsung, which has also picked up Shelby TV, a video-guide software startup.
So far, the most promising video software/hardware service that isn’t attached to a pay-TV company or the likes of Apple, Amazon or Google is Roku, which says it has sold 10 million of its TV boxes. The company is reportedly pursuing an IPO.
* Comcast owns NBCUniversal, which is a minority investor in Revere Digital, Re/code’s parent company.
This article originally appeared on Recode.net.