Rumors have been swirling around Apple and premium video streaming since iTunes introduced the ability to purchase and view video in 2005. Yet, here we are six years later and the content streaming industry has taken off with no streaming vertical from Apple in sight. That may change very soon.
Business Insider is reporting rumors from an analyst at research firm Jefferies that Apple has secret licensing deals in place to launch a video streaming service. Jefferies's Peter Misek reportedly said "...we believe Apple has unannounced deals with all/most of the studios/TV networks." If Misek is correct, Apple's play in the space is either a prelude to a deal with the networks for Hulu or a sign Apple was never really interested in the streaming service in the first place, planning all along to create its own streaming product perhaps to coincide with the release of iCloud. Either way, any premium streaming service from Apple will have huge ripple affects across the industry.
The networks and studios are experiencing a bit of a renaissance with their long tails of content. Yesterday CBS reported its quarterly earnings with an 8% jump in revenue that was in part due to a 21% increase in licensing and distribution of its long tail of content to streaming services like Netflix and Amazon (CBS is not part of the Hulu cooperative that includes ABC, NBC and Fox).
If Apple has deals with the networks and studios then the vetting process for buyers of Hulu should accelerate. If Apple or Amazon are not going to buy Hulu (based on their own streaming services and content licenses over the last month) then Google and Microsoft have to seriously consider their roles in the content ecosystem. Google has some premium content available to be viewed through the Android Market and YouTube, but there is no real premium-streaming product it can sell ads against. Microsoft has next to nothing in the premium content department outside of its Xbox streaming partnership with Netflix and Hulu.
If Apple does introduce a streaming service with the release of iCloud in the fall, the company can make a strong case that there is no reason not to buy an Apple TV box (or an actual "iTV, if such a thing ever exists). As we wrote the other day, Apple wants to take over your living room and there is consumer hunger for a true Internet TV, especially one that is emitted from Cupertino. Apple has $76 billion dollars to truly disrupt the television business, which used to be the networks' biggest fear. Yet, with lucrative streaming licenses now being sold (or at least pitched) to every big tech company, the cable box and television as it has been known for the last 20 years may finally become a thing of the past. It just took a bit of Apple to push it over the hill.