LOS ANGELES — Apple Inc. has joined a handful of
companies, including its chief rival Google Inc. and online portal
Yahoo, in weighing a potential offer for video service Hulu, a person
with knowledge of the situation confirmed.
The discussions are still in the early stages, said
that individual, who requested anonymity because the negotiations are
confidential.
Apple spokesman Steve Dowling said the company would
not comment on rumors or speculation. A Hulu spokeswoman similarly
declined to comment. The discussions were first reported by Bloomberg
News.
Hulu has emerged as one of the leading sites for
watching TV shows online, attracting about 28 million monthly visitors,
according to measurement firm ComScore. Its media owners, News Corp.,
Comcast Corp.-owned NBCUniversal and the Walt Disney Co., have opted to
put the service up for sale, in part because its success was creating
conflicts with existing business arrangements, but also to capitalize on
the hot investment climate for technology companies.
The site could fetch a price as high as $2 billion, according to banking estimates.
Hulu offers a radically different proposition to
consumers than is available now through Apple’s iTunes store, which
sells episodes of TV shows for $2.99, and, in some cases, offers a
99-cent rental. Hulu, by contrast, allows viewers the ability to watch
current TV shows online for free — but with advertising included. A
subscription service, Hulu Plus, offers a broader selection of programs
that can be viewed on more devices for a monthly fee of $7.99.
One media analyst said consumers simply haven’t gravitated to Apple’s TV rental model.
“The natural model for distributing TV shows is
ad-supported or subscription, not on an individual program rental basis,
nor even the episodic purchase model,” said Arash Amel, IHS Screen
Digest’s research director for digital media.
“Subscription and advertising is what the TV consumer
is familiar with, and any digital platform will have to replicate that
model to succeed (in the) mass market,” Amel suggested. “That is as true
for Apple as it is for any other technology company seeking to provide
TV content.”
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