Hulu on the auction block? An Apple-branded TV in the fall? And an iPad in every box? Ah, rumors

editor's corner

Jim O'Neil

It's not even the dog days of summer, but the crop of stories based upon a single rumor--or upon a report based upon a report that's rumor driven--is in full bloom.

The latest, and the biggest is that Hulu is up for sale (see this report based upon a report that's rumor driven).

The L.A. Times Tuesday said it had heard Yahoo made an unsolicited bid for Hulu. The Wall Street Journal, New York Times and a slew of other news outlets followed with reports based upon what seemed like the very loose lips of a single source or two (you know who you are).

Of course, every outlet has said Yahoo might have made an initial offer, but they're not sure.

What is true is that Hulu's board is considering offers, regardless of where they come from, and they're doing it because, duh, everything is for sale if the price is right.

Yahoo's offer--if it was Yahoo that made it (there was even one rumor that said it was an offer from Google (NASDAQ:GOOG)--was substantial enough to make CEO Jason Kilar and the Hulu board sit up and take notice, though. And that's where this story gets its legs.

But the same issue that prompted Hulu to hesitate on pulling the trigger on its IPO last year--the fact that it still doesn't have long-term deals with its content-owning parent companies, NBCUniversal, owned by Comcast (NASDAQ:CMSA), News Corp. and Disney--has to be getting in the way of any significant discussions about a sale as well.

While Kilar has said Hulu is on its way to a $500 million revenue year in 2011 and is profitable, critics have consistently pointed out that the company, if it wasn't getting sweetheart deals from its owners for content, would be seeing a significantly thinner bottom line.

With Comcast aggressively rolling out its Xfinity platform, a score of pay-TV operators loading up their TV Everywhere guns, and an array of content owners looking online for more revenue from their programming, Hulu's survival is always going to be a question. As Verizon (NYSE:VZ) CEO Ivan Siedenberg said in November 2009 about Hulu: "[it's] in for the next eight to 12 months and in two years it won't matter because the world will have moved on."

That clock is ticking.

While we're at it, here's another rumor you can chew on for a bit: Apple (NASDAQ:APPL) will roll out its long-awaited connected TV this fall. At least that's the contention of the DailyTech blog, which reported that a former Apple exec told it the company would enter the TV business by partnering with a CE manufacturer (it suggests Samsung).

A connected Apple TV has been in the rumor mill for a couple of years, with analysts pointing out that Apple could enter the market and immediately claim a hefty share.

While a couple of pundits dismissed the rumor, I think there's a little more mileage left in it than it iss given credit for but barely.

Here's why: this is the year of the connected TV. Every major CE is rolling out one or more entries to the market. The biggest hurdle, however, is that many consumers may buy them, but won't have any idea how to use them. An Apple TV likely would include a user interface that would make it simpler to use--think iPad as a remote control and content discovery tool.

Having an Apple TV ready by fall is a long shot, and the likelihood that Apple would cede control to Samsung, or any other CE manufacturer not in its constellation of suppliers, is iffy.

Still... don't discount it totally. Remember that Apple posted a job listing in February for an engineer to "work on the forefront of new power management designs and technologies ... for Apple's next generation Macintosh platforms spanning from notebook computers, desktop computers, servers, standalone displays and TV."

And also remember that Piper Jaffray analyst Gene Munster earlier this year said Apple had made $3.9 billion in prepayments to companies that could supply it with LCD screens between 27 inches and 50 inches. Munster, who has been predicting an Apple TV set for a couple of years, said Apple could make $6 billion in the connected TV segment by 2014.

So Hulu for sale? Yes. Apple TV by autumn? A stretch, but possible... more likely inn the first half of 2012.

An iPad in every box? That's a rumor I'd buy in a heartbeat.--Jim