Apple Inc. is to be a potential bidder for the online video-streaming service, Hulu, a person close to the situation said Friday.
Hulu, which is owned by Walt Disney Co., News Corp., Comcast Corp.’s NBC Universal and Providence Equity Partners, started presenting its financial information to interested bidders late last month, after an unsolicited offer prompted its board to look for other offers. They began preliminary sale talks with about a dozen potential buyers.
In early July, search giant Google Inc. was said to be among about a dozen companies in talks to potentially buy Hulu. Yahoo Inc. is also believed to be interested.
The online video service streams movies and TV shows from broadcasters ABC, Fox and NBC to computers and – for a monthly fee – to a number of Web-connected mobile devices such as smartphones and tablet computers. It expects its paid service, Hulu Plus, to have over a million subscribers by the end of the summer and its CEO, Jason Kilar, has said it is profitable.
Hulu acquisition could bolster Apple?s iTunes store, which provides videos users can rent or buy, but does not currently stream content or offer a subscription streaming service. It could also help the Cupertino-based iPhone and iPad maker as it spars with competitors such as online video pioneer Netflix Inc., which offers both a DVD-by-mail and video streaming service, and Google Inc.’s popular YouTube video streaming site, which streams free, ad-supported videos and rents movies from several major studios.
An added advantage being that CEO Steve Jobs, who is currently on medical leave, already has a connection with one of Hulu’s owners: He’s The Walt Disney Co.’s largest shareholder and a member of its board.
However, if Apple – or any other company – were to buy Hulu, there’s no guarantee it would be able to continue streaming content from the company’s current owners. A buyer may have to reach a new deal in order to license the content.
Forrester Research analyst James McQuivey said key to any deal involving Hulu would be an agreement for the continued streaming of its current video content. And if, as many analysts expect, Apple is developing its own TV set, the addition of Hulu would put the company in an “amazingly powerful position,” he said.
Hulu’s content combined with the iTunes subscription model would create a serious competitor to Netflix, which has been the subject of a lot of vitriol recently due to a planned price hike.
If Apple can manage to pick Hulu up, the company would have a subscription-based service that, if treated right, could easily rival what Netflix offers consumers.
Hulu on the top
Hulu has reached a dizzying level of popularity among users by offering easy and free online access to episodes of hit TV programs.
In a short time, Hulu has exploded into one of the top Internet video destinations. It now attracts some 27 million users every month, according to ComScore Video Metrix.
Talking about first quarter results, Hulu revealed that it was on track to hit $500 million in revenues this year and had 50% more advertisers in the first quarter of 2011 than the same period in 2010.
On?Hulu?s blog, Kilar discussed results from the first quarter, reporting that the ?content community? will earn about $300 million through Hulu in 2011 and that the platform now boasts 289 advertisers, up from 194 in Q1 2010.
The growing popularity of the subscription plan might make industry interest in Hulu grow, and seeing the potential interest by big companies like Apple, Yahoo and Google, Hulu is definitely on its way to make it big.
Sources: ndtv, latimes, mashable, tgdaily, cinemablend, theatlantic