According to Bloomberg, two contacts with knowledge of the upcoming auction claim Apple is preparing to make a bid for Hulu’s online video service. Other interested parties are reported to include AT&T, Yahoo, and Google, with Microsoft having already dropped out of the bidding. Considering Apple’s struggle to turn the AppleTV into a mainstream product, this acquisition would seem to make sense on that front. If the Business Insider website is correct in their claims about Yahoo’s bid for Hulu, it included a guarantee of four to five years of exclusive content rights to current TV shows and older movies. If Apple obtained something similar, they would be in a good position to make the AppleTV the only Hulu compatible device on the market and therefore, make it the hardware required to view said content. Alternately, Apple might opt to include Hulu subscription services as another possible iTunes store purchase, broadening their portfolio of streaming media options.
With the reported value of Hulu set at around $2 billion before the auction even began, it won’t be a cheap purchase. But it’s well within Apple’s grasp, given their stash of over $76 billion in cash and securities. Another consideration is the fact that Hulu is partially owned by the Walt Disney Company, which has Apple CEO Steve Jobs as its single largest shareholder.
On the flip-side? John Gruber of Daring Fireball points out that Hulu is designed around Adobe Flash technology, which is not exactly something Apple wants to add to their product portfolio. HTML 5 doesn’t yet support digital rights management, so conversion to that standard isn’t even an option right now. There’s also the problem of existing licensing. Some of the programming on Hulu Plus is only licensed for viewing on a PC, so that means Apple would be paying billions for a bundle containing some content with usage limitations.
Until further notice, it’s still anyone’s guess. Anyone feel like placing bets? Double payback if you’re also betting on a name-change to iHulu!
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