At last the missing element of the Hulu puzzle has fallen into place. Since earlier this month it was known that the streaming service was looking into selling out to someone, and the list of potential buyers included tech luminaries such as Amazon, Netflix, Microsoft, Yahoo and more. One name that no one had talked about was Apple, and that just seemed odd for several reasons, but it was just the way things were.
Now Bloombergs is reporting that “people, who weren’t authorized to speak publicly,” are saying that Apple has indeed entered the game and is holding preliminary talks with the streaming video service about a potential purchase. Scott Sutherland, a Wedbush Securities Inc. analyst in San Francisco, told the publication, “Part of the ecosystem of Apple’s future is to include more video. It’s something they are focused on.”
One point noted in the post is that the expected selling price of Hulu is north of $2 billion, and that Apple tends to not spend more than a few hundred million for anything it buys. This is true, but this more about the licenses and the place it would show up immediately. Remember, Hulu is on Microsoft’s Xbox, Sony’s PlayStation 3 and some of Google’s Android devices. And riding in on a Trojan Horse would come Apple. “Hey everyone! Nice of you to let us in the door and now make money from all of you!”
It has also seemed rather inevitable that Apple would finally have to launch a streaming video service to compete in the marketplace. With the purchase of Hulu they would get a ready made service that already has licenses and infrastructure in place, all they would need to do is hand the keys over in this case. Apple could spend millions in development and deployment, and then go through the hassle of negotiating the contracts, or they can pick up this ready made solution off the shelf. It seems like a no-brainer to me.
And there is one final piece of this pie: the unofficial Amazon tablets. Everything we hear about them seems to indicate that Amazon Prime Instant Video will be a major component of the devices, and the company seems to be bolstering it with more content all of a sudden. Now, while no one tablet has taken a major chunk out of iPad sales, Amazon has proven with the Kindle it can move hardware. If they were to have similar success with a tablet, and one of its selling points was access to streaming video, wouldn’t it make sense Apple needs a service of its own? Perhaps free Hulu Plus access on iOS devices, but charge for it if you access it elsewhere? (there might be some legal issues there, not sure)
Apple buying Hulu makes a ton of sense, now we’ll just need to see if it’s more than just a rumor.
What do you think? Should Apple buy Hulu to compete with what may be coming down the road?