How The Pending Sale Of Hulu May Affect The Internet

by Mike Vaystub · July 22, 2011

Hulu, the company that started out hot and heavy as the predicted killer of all TV as we know it, has seen its hype fizzle like a classic high school jock turned high school janitor story. Hulu has long been feeling the pressure to generate more money from its media owners and is currently openly for sale with lots of changes to come.

Despite Hulu not being as profitable as one would have thought, it still has upside and market interest due to the great concept and more importantly the fact that it is owned by and has the exclusive rights to NBC, ABC, and FOX programming. Apple is the latest rumored company to show interest, with other reported suitors including Google, Amazon, Yahoo, and AT&T. All of these companies have huge fan bases in the hundreds of millions, much bigger than Hulu's mere 1 million subscribers, so that is the immediate impact, but it goes much deeper than that.

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Hulu is right on the brink of reaching 1 million users and is listed at the minimum sale price of 2 billion dollars. It currently creates most of it's profit from advertisements by forcing both it's free and paid users to sit through ads during content. Companies are willing to pay more for a company that doesn't have nearly the user backing past sites have had, but that just shows the potential this site is believed to have under the right management and exposure.

Yahoo and Amazon

Both relatively new to the streaming video market and would be taking the biggest risk in such a purchase. Yahoo is one of the top three most used homepages and is always battling Google for traffic. Providing such a service could be a great boost if their viewers would accept the change of coming to the site to watch 30 minute shows instead of the common use of quick searches or a glimpse at the news. It is unknown though how Yahoo would use the service, or how they would charge for it, so this deal is a big question mark and a possible game changer for them.

Amazon is in a similar situation to Yahoo, most commonly known for being an online retailer. They have, however, been on a mission to compete with Apple's media market for a while now. They already have their own app and video store, and also bought the rights to CBS (not exclusively though) just a couple of months back. They have a clear idea of what they wanna do and already offer an annual membership to Amazon Prime, which gives members streaming shows, so an acquisition of Hulu would greatly strengthen their market position.

Google

Notorious for offering almost everything it owns for free, Google and has forever been on a quest to own the whole internet (and pretty much your whole life). One would only assume that they would find a way to offer Hulu for free as well, just to bring more people to their site. They did however have a lot of well reported struggles making YouTube profitable for years after that purchase. It is interesting to imagine how owning Hulu would affect their social media. Nowadays barely anyone watches a show without live tweeting it, while Facebook feeds jump 200% in activity whenever shows like Teen Mom is on. So having people watch Hulu and immediately transcribe their thoughts to Google+ may appeal to the millions of people who love sharing their opinion and may be just enough to make the jump from Facebook.

Apple

Finally, Apple is the company currently being reported by Bloomberg as being in talks with Hulu. Apple has all the tools to make Hulu work and is missing the actual product, so this is something they have needed for a long time. They have all their mobile devices and computers, the app store, and most importantly AppleTV; a product which they believe in but has not being flying off the shelves like the rest of their products. Furthermore, Apple can sell water to a well and never heard of the word free so they would undoubtedly find a way to market Hulu and multiply the subscriptions tenfold.

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I can already picture the Apple commercials: "Apple has just reinvented the way you watch TV again!" Either way, when one of these companies snatches Hulu up expect a lot of changes and finally watching a lot more television without paying that ridiculous cable bill.