Thursday, July 21, 2011, 04:50 pm PT (07:50 pm ET)
Apple rumored to consider bid for Hulu video serviceApple may be looking to grow its share of the video market through an aggressive acquisition, as sources have reported that the company is considering placing a bid in an auction for the popular streaming video service Hulu.
Bloomberg reported on Thursday that the company is in "early talks" that could lead to an acquisition offer. That's according to two people with knowledge of an upcoming auction.
Hulu has held a high-profile since its launch, in part because it was backed by several media conglomerates in a joint venture. Owners include Walt Disney News Corp. and Comcast Corp.'s NBC Universal. It's worth pointing out that Apple CEO Steve Jobs is both a board member and the largest shareholder of Walt Disney.
The report also noted that Google, Yahoo, AT&T and others have met with bankers representing the company.
Hulu began offering its Hulu Plus subscription service on the iPhone and iPad last year. Last month, however, the company had to revise its app because of new rules from Apple that ban links to out-of-app purchases.
According to data released this spring, Apple holds just 4 percent of the digital streaming and downloadable video market in the U.S in a three-way tie with DirecTV and Time Warner for third place. Netflix takes up the lion's share of the market with 61 percent of all viewings, while Comcast placed second with 8 percent.
Within the video on demand market, which doesn't count Netflix or Hulu, Apple held a more respectable 64.5 percent share in 2010. Microsoft was second with 17.9 percent and Sony came in third with 7.2 percent.
Apple had been rumored to offer remote storage of movies and TV shows in iCloud, but the feature was not announced during the service's announcement last month.
The company's interest in Hulu may also be for its Apple TV set top box. During an earnings conference call on Tuesday, Apple said sales of the device "continue to do well," though the company still calls it a "hobby." Chief Operating Officer Tim Cook noted that his company is "continuing to invest in it because we think that there is something there."
Rumors continue to swirl that Apple is preparing to launch a connected television set, possibly as early as late 2011. If the reports of Apple's plans to enter the high-end television market are indeed true, Apple may be going after Hulu in order to guarantee that an Apple-branded TV launches with sufficient content partnerships and services to disrupt competitors and quickly gain traction.
According to one analyst, Apple could gain $100 billion in market capitalization with a connected TV, assuming that it achieve similar share as industry players such as Sony, Samsung and Philips.
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