“When you buy an episode on iTunes everyone in the production food chain makes a profit. Hulu and its ilk are money-losing services that rely largely on concessions in various guild contracts that pretty much keep the writers and producers and actors from sharing in profits that aren’t there anyway, at least not yet,” Robert X. Cringely writes for PBS.
Cringely writes, “Fox owns a big chunk of Hulu, yet American Idol performances are exclusively available on iTunes, not Hulu. Why is that? Because American Idol performances on iTunes make a lot of MONEY, that’s why. Adam Lambert downloads alone make more money every week — a LOT more money — than do ALL the shows on Hulu put together… Hulu will remain an artifact of network labor agreements and will be vulnerable for that reason. Hulu can’t afford to PAY its way.”
Cringely writes, “Apple has at this moment just under $29 billion in cash and not many good ways to get a reasonable return on that money. Only Microsoft has more cash than Apple and Microsoft is being pulled in a lot more directions so Microsoft doesn’t have Apple’s flexibility.”
Cringely continues, “What will Apple do with that money? Most of it will remain unspent is my prediction, but I’m guessing we’ll shortly see $3 billion or so per year go into buying Internet rights for TV shows — not old TV shows but NEW TV shows, shows of all types.”
“Three billion Apple dollars spread around that crowd every year would buy Internet rights for EVERY show — more than every show in fact,” Cringely writes. “Whole new classes of shows would be invented, sapping talent from other parts of the industry. It would be invigorating and destabilizing at the same time… And just as the artistic heart of TV shifted to cable with HBO in the 1980s, so it will shift to the Internet and Apple. And where will be Hulu? Nobody will care.”
There’s much more in the full article – recommended – here.