As Business Week astutely notes, the fallout from Disney’s deal with Hulu isn’t just on CBS (the lone network not on Hulu) or Google (YouTube still hasn’t found a viable revenue system). It impacts Apple as well.
And the more popular Hulu becomes, the less compelling Apple’s strategy of renting and selling video content online is, says Gartner (IT) analyst Michael McGuire. “Over time, perhaps the direct-payment model goes away,” he says. Hulu is poised to become a bigger threat in the event it can strike content-sharing partnerships with cable companies, analysts say. Cable content could help the unprofitable Hulu wring profit from the placement of ads alongside its programming. For cable companies, partnering with Hulu represents a way to remain relevant as consumers increasingly view video online.
Once Hulu can get some of the premium cable outlets on board like HBO, Showtime, A&E, et. al. then it’s not a matter of content companies being worries, it’s cable companies that should be scared.
Since there are very few CBS shows I watch, most of my television viewing is done exclusively on Hulu.
Apple might not dominate video content, but it will have it’s technology products and music sales.