Apple to Potentially Acquire Video Streaming Service Hulu

By Erin Harrison July 25, 2011

Rumor has it Apple could soon be bidding on video-streaming company Hulu, according to several media reports. But it’s still too early to determine how serious Apple executives are about the $2 billion potential acquisition.

The Associated Press reported that “a person close to the situation” spoke on condition of anonymity because they are not authorized to talk about the issue, but confirmed that the company is in preliminary discussions with Hulu, which is “being considered for sale by its owners,” according to the “Deal of the Day” blog in the July 22 edition of the Wall Street Journal.

Hulu, by most accounts a video-streaming “pioneer,” is valued at $2 billion, the Journal said, which would take a bite out of less than 3 percent of Apple’s $76 billion cash heap.

An Apple acquisition of Hulu would help the company compete with Netflix, serving as a major boon to Apple’s iTunes store, which provides videos users can rent or buy. Hulu is an online video service that offers a selection of TV shows, clips, and movies as well as through its ad-supported subscription service, Hulu Plus.

Hulu offers a subscription-based streaming service and brings in revenue from ads that accompany content it streams to users free-of-charge. Apple would certainly reap rewards from those sales, but as Reuters pointed out on July 25, Apple likes its own brands, and Hulu isn’t one of them. Apple could use the same money it would invest in Hulu and devote it to developing its own video service, compatible on Mac and iOS devices.

NBCUniversal, News Corporation, The Walt Disney Company, Providence Equity Partners and the Hulu team share in the ownership stake of the company, according to Hulu.

Hulu may become an even hotter commodity, following Netflix’s announcement that it plans to raise prices by up to 60 percent, TechZone360 reported earlier this month. Thousands of customers responded with complaints and threats of dumping Netflix in favor of competitors such as and Redbox.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.

Erin Harrison is Executive Editor, Strategic Initiatives, for TMC, where she oversees the company's strategic editorial initiatives, including the launch of several new print and online initiatives. She plays an active role in the print publications and TechZone360, covering IP communications, information technology and other related topics. To read more of Erin's articles, please visit her columnist page.

Edited by Jennifer Russell

Executive Editor, Strategic Initiatives

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