July 30, 2011, 8:02 AM — Why the heck would Apple want to buy Hulu?
I’ve lost track of the number of times I’ve heard that question since Bloomberg reported last week that the two companies were in early talks. Apple, with its already extensive iTunes Store catalog of TV shows and movies, would seem to be a strange bedfellow for the predominantly TV-streaming site that’s jointly owned by big media names like News Corp, Comcast, and Disney.
While the attention has focused around why a Hulu-Apple deal doesn’t make sense, in some ways the two make perfect partners: 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 good reasons why Apple might seriously consider acquiring Hulu.
Really, though, it comes down to just one: Apple has done TV, but it’s never done it right.
Gently down the stream
(Image Caption: The iTunes Store has a wide catalog of TV content, but most of it is on a pay-per-view model.)
In terms of pure content, Apple doesn’t stand to get much from a Hulu deal that it doesn’t already have. Cupertino’s been making deals with television networks for nearly half a decade, and with a few exceptions, almost any show currently on television can be found in the iTunes Store.
But in terms of delivery, it potentially gets quite a lot. According to the Bloomberg report, the deal would come with a five-year licensing extension, which would presumably cover streaming Hulu’s library of content. The first two years of that would be exclusive, as well.
Apple’s embrace of streaming media delivery has been limited; whether for licensing or technology reasons, it’s largely focused instead on a pay-per-view, download model—though the company did start offering rentals of movies in 2008 and TV shows in 2010. But even the company’s newest online service, iCloud, relies on the idea of files that get downloaded to all of users’ different devices.