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Online streaming-TV service Hulu is popular, but it’s not the kind of class act you get with Apple. That could change, though, if rumored talks of an acquisition come to fruition. Apple would bring a level of professionalism and consumer-friendly service to Hulu, offering customers its built-in Apple experience, suggested brand consultant Rich Pasqua. And it would probably do away with a lot of those annoying ads.

The search for a new corporate owner of online video website Hulu continues with Apple (Nasdaq: AAPL) now sitting across the negotiating table, according to the rumor of the day. The companies are engaging in early talks, according to two unnamed sources cited by Bloomberg.

Neither responded to MacNewsWorld’s requests to comment for this story.

A deal to acquire Hulu will be struck sooner or later — if not by Apple, then by another corporate suitor. The company’s owners — News Corp. (Nasdaq: NWS), Walt Disney (NYSE: DIS), and NBC Universal — appear eager to exit their investment and have reportedly retained investment banks Guggenheim Partners and Morgan Stanley to prepare for the sale.

Yahoo (Nasdaq: YHOO) has already made a solicited offer, according to reports.

Subscription Service, Ad Revenues

Acquisition by Apple might make more sense than by Yahoo or a number of other potential buyers, Greg Sterling, principal of Sterling Market Intelligence, told MacNewsWorld.

“Apple already has a relationship with many of the content providers on Hulu through iTunes. Also, the iPad and iPhone are very popular content viewing platforms,” he said.

Apple could monetize the acquisition in a number of ways, Sterling speculated.

For one, it would certainly offer a subscription service. It would also incorporate the ad services — not to mention high revenues — into its own ad portfolio, he added.

Hulu leads in video ad impression, as well as in total ad minutes and average ad per view, comScore’s Video Metrix has found. In April 2011, comScore reported that Hulu generated some 1.1 billion video ad impressions, or 29 percent of the 3.8 billion video ad impressions all together in the U.S. that month.

It’s conceivable that Hulu might even give Apple a much-needed boost in social media 6 Ways to Use Social Media for Business. Free Guide.. The site recently launched a feature that allows users to comment on a specific moment or instance while watching any video on Hulu — say, a funny scene in a TV episode — and then share those remarks and the relevant video moment on Facebook.
No Impulse Buyer

It’s possible that Apple will step away from the deal, Sterling said, if the asking price turns out to be too high. Estimates have placed Hulu’s valuation at US$2 billion.

More than likely, though, Apple will want to push the acquisition through, said Rich Pasqua, creative director at Siegel + Gale.

“Apple is not a reactionary company, but they do know what’s going on,” he told MacNewsWorld. “Apple will continue to place its bets on quality and consistency, and it will protect the revenues it derives from selling content.”

In turn, Apple would bring a level of professionalism and consumer-friendly service to Hulu, offering customers its built-in Apple experience, Pasqua said.

It would make some changes to Hulu though, he predicted.

“I don’t believe that Hulu would continue the same level of advertisements on streaming video,” said Pasqua. “The advertising would need to match Apple’s brand DNA.”
Who Wins? Who Loses?

With Apple backing Hulu, the most obvious company to feel the competitive bite will be Netflix (Nasdaq: NFLX), especially after the recent customer uproar over its new pricing, Pasqua said.

“People are consuming content from several different places now,” he noted, “so a poorly planned price hike can hurt the business despite having loyal customers.”

Another possibility is Amazon (Nasdaq: AMZN), but its efforts in this area are still uncertain.

“Initially, Amazon will likely mix free and paid content to attract consumers,” Pasqua said. “It’s the natural progression to go to a premium video content model.”