The rumor is in no way far-fetched. Earlier this month, Robert Iger, CEO of Walt Disney, one of Hulu's owners, confirmed that Disney and the other owners – News Corporation, Comcast's NBC Universal, and Providence Equity Partners – were "committed to selling" the popular service.
Not only that, but Bloomberg's sources report that the content providers in the ownership group are willing to sweeten the deal by guaranteeing a five-year extension of program rights along with two years of exclusivity.
From Apple's point of view, the move makes sense. iTunes is not a streaming or subscription service – it's strictly rent or buy. Adding Hulu's TV and movie service to Apple's offering would not only beef up iTunes and its collection – which needs it – it would also instantly create a strong contender to Netflix, which is currently licking its wounds after a mid-month poorly handed price hike.
Hulu is privately held, but estimates on the Street are that it's worth in the neighborhood of $2bn. That may sound like a chunk of change to mere mortals, but when Apple reported its "insanely great" financial results for the third quarter of its fiscal 2011 earlier this week, it also revealed that it currently holds $76.2bn in cash plus short-term and long-term marketable securites.
If Apple were to pop $2bn for Hulu, doing so would reduce its pterodactylian nest egg by a mere 2.6 per cent.
Traditionally, Apple has shied away from major acquisitions – so much so that its biggest so far was the bacon-saving $400m buyout of NeXT Software, which brought both the underpinnings of Mac OS X and now-CEO Steve Jobs to Cupertino. Yes, that'd be about $575m in today's dollars – but still far shy of the $2bn or more that it migtht take to snag Hulu.
But these days, Apple seems to be a bit less tight-fisted than before, what with $76.2bn burning a hole in its pocket. Also revealed in Apple's Q3 FY11 report was that Jobs & Co. chipped in $2.6bn for its share of the $4.5bn that they, Microsoft, RIM, EMC, Ericsson, and Sony paid for Nortel's 6,000-plus wireless-patent hoard.
Two-billion simoleons no longer looks all that daunting, does it? Especially if by buying Hulu, Apple could keep it out of the hands of, say, Google. ®