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...