Saturday, May 2, 2009

What Disney-Hulu Means for Apple

Should Apple be more worried now that Disney is joining forces with Hulu. I don't think so. Each follows a very different business model. For Hulu, it is all about advertising; For Apple, it is all about transaction of commercially free content. Advertisers tend to be concerned about ratings of content and less likely to associate itself with content of questionable taste - whether that means language, nudity, or just subject matter. In the transaction based model, the consumer decides what is appropriate by what he or she decides to spend their money on. And while some age-based issues may exist, content appeal impacts the transactional return. Too very different models, two very different choices.

Of course the other player is You Tube, the leader of user generated content. For me, they too serve a different model than Hulu. You Tube is a great place to find clips; Hulu is for full length shows. They could in fact be seen as complementary. It could be possible that You Tube and Hulu could enter into an agreement where interest in a clip on You Tube could lead to a link to Hulu to watch the entire show. They same scenario would hold true for as well.

The most interesting assessment is this, "Never mind that Apple CEO Steve Jobs is Disney's largest shareholder. Hulu's pact with Disney serves as a reminder that if Jobs & Co. wants to make the splash in online video they appear poised to make, Apple needs to act fast."

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