Apple makes a move for Hulu

  • 29/07/2011 AT 16:12 by It's a Gadget Staff
  • News

Apple and HuluThe second most valuable corporation in the world, Apple Inc., is looking to spend some of its $76 billion on Hulu, the online TV streaming service. There has been no official announcement of an offer, but two insiders have leaked it. Hulu is owned by News Corp, Comcast, and Walt Disney.

The advantages to Apple would be a competitive product to face off with Netflix, through a new subscription service. To sweeten the deal, five years of program rights would be tacked on, with exclusive rights extended to two years.

Some analysts suggest that Apple must invest in video in order to secure their future. Bloomberg says that for Hulu they may have to sink more than $2 billion into the deal, but the whole idea is contrary to Apple’s phobia toward large acquisitions. NeXT Software was the largest deal Apple has ever made, at $400 million. It was the clencher for putting Steve Jobs back on the Apple throne back in 1996.

There have been other recent acquisitions by Apple that are noteworthy. Just recall the Nortel Networks deal for $2.6 billion last June, when Apple bought patents as a member of a group. Even now, they are thinking about more patent purchases from InterDigital at over $3 billion.

Currently, Apple does not have any subscription service for movies or TV shows. Rather, they rent individually for $4.99 HD or $0.99 normal. If the current Hulu price structure were inserted into Apple they would offer a basic set of shows with embedded ads and an advanced level with access to a wide array of shows for $7.99 monthly. Some analysts believe this is an important addition to Apple’s products.

Disney announced July 6 it was dedicated to selling the company. The interesting fact is that Steve Jobs is the biggest shareholder and on its board of directors.

According to other reports, Google, Yahoo, and AT&T have all expressed interest. Business Insider claimed that Yahoo was willing to shell out up to $2 billion for Hulu.

Hulu is expected to reap over half a billion for 2011 revenue and achieve a 1 million subscriber database by the beginning of September, according to its CEO, Jason Kilar. In June, Hulu was up for sale, once it had been given an offer. An extended rights program is part of the sale, but the additional financial info are presented to potential buyers under a non-disclosure. Amazon may hold off bidding without guaranteed access to shows.

Currently, Hulu Plus can be used on iPod Touch, iPad, and iPhone. You can also gain access to it through the Xbox, PlayStation 3 and Android phones. So why would Apple want to buy Hulu, when it has access to Hulu Plus? One reason is to reduce costs for the services. The other is because Apple is in a growth stage, vying to keep well ahead of all others in the game, meaning Google, Microsoft, and Yahoo.

Apple, itself has climbed $6.01, that’s 1.6%, up to $393.30, on the Nasdaq in New York. The total gains have been 22 percent for the entire year.

Source: BGR


0 Comments

You can be the first one to leave a comment.

Leave a Comment