The latest news from the Hulu rumor mill had Apple interested in taking a look at the books and possibly considering an acquisition of the web video startup, but the chances of that occurring are probably highly unlikely.
Why Apple won’t be cracking open its enormous piggy bank on Hulu, here are 3 main reasons.
iTunes has been chugging along for years proving to be a big incentive for consumers to jump on the Apple wagon. The sleek market on every Windows PC, Mac computer and iOS device is already the largest music market in the world, and with over 200 million paying customers on board, Hulu’s one million subscribers can’t compare.
Apple could easily create a subscription service from scratch on iTunes, allowing them to save the time and money needed for an acquisition and merger.
If you followed Apple over the years since Steve Jobs, the company has been known to be very selective about the products they offer. During an interview at the D8 conference in 2010, Jobs summarized the strategy:
“Apple is a company that doesn’t have the most resources of everybody in the world, and the way we’ve succeeded is by choosing what horses to ride really carefully, technically.”
All of the web and software offerings that Apple provides to consumers today only seem to have one objective: sell Apple hardware. The current revenue generated by iTunes is just a drop in the bucket compared to the revenue generated by the iPad, iPhone and Mac. Should Apple buy Hulu, it’s unlikely that Hulu would have any sort of halo effect on the rest of the company’s products since it wouldn’t be able to exhibit the value or power of Apple’s hardware. It would only serve as an isolated service, thus reducing the value of such an acquisition for Apple, since any revenue that Hulu could possibly generate would be considered pocket change.
Hulu used to be the place to go for watching free television online. However, the networks seem to be pulling their content back after noticing that it might be stealing their crucial primetime audiences. The networks are addicted to television ad dollars and won’t let anything come between them and their ratings if they can help it. With the recent pullback, Apple may not find it in their best interest to jump on a retreating ship.
Of course it’s not to say that Apple hasn’t taken any interest in the bidding process not to buy Hulu, but to prepare for any assault against iTunes. They may even try to make their competitors pay a premium for the site by appearing to make a bid or to persuade competitors from testing the bidding waters.
In the end, Hulu will not be joining the Apple orchard.