Apple is considering making a bid for the online video service Hulu, according to a report.
Two industry insiders with knowledge of the bid told Bloomberg that negotiations between the two companies were already taking place.
However, the sources only spoke to Bloomberg on condition of anonymity and both Apple and Hulu have declined to comment on the report.
Hulu, which is owned by Walt Disney, News Corp, Comcast and equity firm Providence Equity Partners, was put up for sale last month. Other interested parties include Yahoo, Microsoft and Google, according to reports.
Analysts, though, said that Apple was focused on video output and that reports that it was investigating a deal with Hulu were unsurprising.
Indeed, Hulu is expected to hit the one million subscriber milestone next month and it was estimated by Hulu CEO Jason Kilar that the company could turn over $500m in revenue for 2011. A subscription-based service would add another string to the bow of iTunes, which currently lets customers either rent or buy video content outright.
This would put Apple in a strong position to compete with Netflix, which currently dominates the US video-on-demand market with more than 23 million subscribers.