Will Hulu Hurt Apple's iTunes Offerings?
Maybe, in that news of Disney joining up with Hulu to offer even more free, advertising supported television and movie content via the web, could reduce the amount of people in the US who choose to pay for that same content, ad-free for rental or purchase via iTunes. However, there are some other factors involved that Business Week isn't addressing:
- Hulu is only currently available in the US. iTunes TV and movies are available in Canada, the UK, Australia, and most recently Germany.
- Streaming content such as Hulu is a great option, but not always the best option for every situation. Being able to download, store locally, and watch or take content on the go to watch is still important. (And will remain so until the Internet is as ubiquitous and transparent as electricity).
Most importantly, however:
- Apple has repeatedly stated that they operate the iTunes store at break-even levels just to get people to buy more iPods and now iPhones. Whether that's semi-disingenuous or not, the iPhone will eventually be able to play Hulu content as well -- either directly off the web like YouTube or via a 3rd party Hulu offering in the App Store. More reason to buy iPhones and iPod touches.
If nothing else, Apple has proven to have some small insight into where the "fat middle" of consumerism. They don't blaze trails, they don't bleed edges, but they wait and see and when they feel a market is mature, they offer their take on it.
Our bet is we see that Hulu app... whether AT&T allows it or not is another matter...
Editor-in-Chief of iMore, Executive Producer at Mobile Nations, co-host of Iterate and ZEN and TECH, cook, grappler, photon wrangler.
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It depends just how much money people are actually spending on TV shows in iTunes. Have they reached a billion video downloads yet? The video downloads of iTunes probably aren't as lucrative as the music or app stores are.
That makes sense, but the reason there's been a billion app downloads is the fact that most of them were free. And besides, you can't get apps anywhere besides iTunes (unless, of course, you jailbreak); you can, however, watch TV shows an movies for free or not from many different sources other than just iTunes.
I can't believe people still spend 10-15 bucks on a movie from iTunes that you can't even put onto a DVD. $8.99 per month gets you unlimited rental by mail and unlimited webstreaming from Netflix people!
I bet we see the Hulu app introduced at WWDC.
Napster created a market for iTunes, sometimes driving demand for something help -rather than hinders similar offerings.
Apple make money out of music but they don't make much from TV shows or movie rentals. Given Hulu's popular business model and following, I think they are going to try and partner with them as best as they can. The more functionality they can build into their products, the better they will sell. Expect a Hulu app for the iphone, and Hulu integration into Apple TV and iTunes. Apple may get a revenue share agreement for links directly to Hulu's content - and Hulu could go for it, given the popularity of iTunes to start with.
I have never purchased a movie from iTunes and most likely will never. Not worth the money with so many other options out there. And as pointed out in the article, it would be nice to have a hard copy of the movie on the phone. Now if only Hulu could/would implement the same download setup that slacker radio has for the blackberry: download the content to the phone's device. That would be a match made in heaven