As most of you who have read my columns and research papers over the years know all too well, I have been a proponent of many things Apple, including their various media plays. While the iTunes Store has been offering video content since 2006, it doesn't take a analyst to notice that the company rarely talks about the number of movies and TV shows that it delivers. Rather, the big numbers are actually in apps for all their mobile gadgets because, honestly, sales of movies and TV shows through the years have not proven to be "the cat's meow" as Apple might have hoped. If nothing else, that should be a glaring indication that video is not exactly a cornerstone of the company’s business thus far.
Meanwhile, companies like Netflix and Hulu have been attracting plenty of consumer attention but are struggling mightily to make even a small profit. And oh yes, my friends, Apple has done TV, but alas, it’s never really done it right. So while all the recent hubbub has focused around why a Hulu-Apple deal doesn’t make sense, in some ways these two companies actually make perfect partners. Consider these nuggets; Hulu has a large catalog of video content that consumers want to watch, and the licenses to stream them; Apple has proven experience in delivering content to users on a variety of devices. Despite what might seem like a considerable amount of overlap, there are pretty good reasons why Apple might seriously consider acquiring "The Hulu". A company such as Hulu would give Apple a strong position in the quickly burgeoning streaming video business, a pretty hip move, but is that a business Apple definitely wants to be in? The Apple TV—specifically the one I use, the tiny Apple TV 2 , which has a decided emphasis on steaming over storage, suggests it does. While the company has continually described its own foray into the living room as a “hobby,” chief operating officer Tim Cook recently said that the company would continue investing in the device because it thinks there’s something there. But clearly, reading between the lines of Mr. Cook’s comment, it’s obviously not all there yet.
Some have suggested that Apple’s purposes might be just as well served by a deal streaming Hulu to the Apple TV, as Apple has done with Netflix. I don't like that option because of the obvious risk that Apple might cannibalize its own video sales without necessarily driving enough Apple TV adoption to compensate. The outright owning of a company like Hulu would instead give Apple the power to shape the service to its own needs. Hulu indeed has been weighed down by its own problems; but being acquired by Apple might be very beneficial for the company, which has seen its share of friction between "content" management and ownership and knows the ropes. The content providers (and co-owners) have increasingly hamstrung Hulu’s offerings and I proffer one glaring example. It really was once a simple matter to find and watch a show, but consumers now have to contend a totally bizarre maze of hoops to jump through, depending on your operating system or device you will ultimately watch the content on. Frankly, this absurdity won't fly under potential Apple rule. Devices are the Apple’s bread-and-butter, and the smart money would bet heavily that expanded licensing for streaming to devices would be a big part of any deal Apple tried to strike with Hulu’s current owners. A streaming service whose prime focus is the Web wouldn’t fit very well with Apple’s business, but streaming TV shows to the iPhone, iPad, iPod touch, and Apple TV is, well, ahem, exactly what the folks in Cupertino have been (and continue to be) angling for.
Okay Aldo, and what about the owners of the precious content? Simple, I can just imagine what with more than 220 million iOS devices out there, a streaming service for these iOS users could prove very, very lucrative. And Apple will, no doubt, utilize the iTunes accounts that all those users already have. That means money, big money, plain and simple. The real potential win for Apple, though, is adding a subscription media service. The forward thinking tech company hasn’t ever really, genuinely tried this model, unless you count the Season Pass offerings on the iTunes Store, and in my opinion, those are a joke. Apple’s approach of à-la-carte purchases and rentals looks decidedly old-school for a company that’s otherwise in the forefront of the digital media revolution and the addition of Hulu could vastly change that landscape forever. What do you think? Do you already subscribe to any of these streaming services? Does Apple's addition of Hulu make sense to you? Please email me with your thoughts and experiences, I enjoy the give and take, even if you think I have been smoking the "hippy lettuce"....
