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Apple rumored to be making a bid for Hulu

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Apple, which is sitting pretty on an Uncle Scrooge-sized pile of $76.2 billion in cash, is rumored to be eyeballing making a bid in the upcoming Hulu auction. Apple is currently the world’s second largest company, and surely figures it needs to put that cash to use, especially with an enterprise as tantalizing as the Hulu video service is.

Hulu would add a subscription service to Apple’s portfolio, which, valuable as it is on its own, could potentially flourish within the highly-insulated and interconnected tech ecosystem Apple has put so much work into creating. Hulu also offers Apple an excellent opportunity to jump headlong into the subscription-based streaming video marketed that’s been dominated with much aplomb by Netflix until that company’s recent dust-up with subscribers over upcoming rate changes.

Hulu’s currently owned by Walt Disney Co., News Corp. and NBC Universal, who collectively are dangling the promise of a five-year extension of media rights, including two years of exclusivity, to potential bidders. Hulu is currently valued at around $2 billion, which would hardly put a dent in Apple’s current cash level. However, Apple has just about never been involved with major acquisitions, with the company’s last big deal the 1996 purchase of NeXT for $400 million that brought Steve Jobs back into the fold.

Hulu would offer a different video paradigm for Apple, whose iTunes store is currently only pushing video on an a la carte basis. Video on iTunes is all based on rentals, with TV shows going for about 99 cents an episode and HD movies streaming for $4.99. Hulu, on the other hand, offers some ad-supported free content as a teaser for $7.99 a month Hulu Plus subscriptions, which offer a wealth of streaming TV and movies. Apple already has a lot of infrastructure in consumer’s hands, especially with the company’s past forays into the realm with Apple TV. The question then is whether or not acquisition-shy Apple is willing to go toe-to-toe with potential bids from other wealthy Hulu suitors like Yahoo, Google and AT&T.

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Derek Mead
Former Digital Trends Contributor
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