NEW YORK (TheStreet) -- Given that Apple (AAPL) has shown it's willing to dabble in large scale M&A, the big question is what does it do next? While there's work for Apple to do with respect to digital music and streaming radio, the next frontier could very well end up being streaming video.
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If Apple goes there -- and there's no shortage of rumors speculating it will -- the logical place to look to propel the strategy is Hulu. Here's what we know about Hulu:
- The owners of Hulu -- NBCUniversal (a Comcast (CMCSA) subsidiary, Disney (DIS) and Twenty-First Century Fox (FOXA) -- aren't quite certain how to move forward with Hulu. Maybe they can't get on the same page. I don't know. But they simply haven't maximized the platform's potential.
- If the owners of Hulu make moves to go full on boar with the platform, they could put serious hurt on Netflix (NFLX).
- The owners of Hulu might actually be able to execute a Hulu grand plan using Apple as a conduit, however the question is ...
Is this -- streaming video -- an area Apple wants to get into?
I'm on the record -- it makes more sense for Apple to focus on hardware and leave streaming video to others. But, clearly, Tim Cook's willing to alter focus because, there's no doubt Apple's not just buying Beats for the headphones. So, if Apple's going to expand (and revive) its digital music empire, we have to consider the possibility it will do likewise with other streaming media.
Don't forget -- we keep hearing that Apple wants to either enhance the existing Apple TV with content and/or build an actual television set with a significant content component, but can't because major programmers aren't willing to corporate. If there's any truth to this speculation, we must consider how Apple gets it done. A takeout of Hulu could very well represent the endgame.
If Apple buys Hulu it would, ideally, become the cornerstone of Apple TV. If that happens, Hulu's owners would be smart to convene with the rest of the nation's big programmers and agree to sell the most premium content to Apple.
Apple certainly has more cash than Netflix -- or any other streamer for that matter -- will ever have on the books. So it shouldn't come as a surprise to regulators, who might be concerned the programmers are colluding to favor Apple over others, particularly Netflix, that Apple suddenly starts winning all the deals. It wouldn't be collusion; rather it would be that Apple simply decided to open its war chest and get in the game. Thus, it changed the game and we have no choice -- financially -- but to sell the best programming to Apple, the most able and highest bidder.