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Apple Has Something BIG Planned for iTunes: A Netflix Acquisition?

Apr 6 2011, 1:51pm CDT | by , in Rumors | Apple

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Apple Has Something BIG Planned for iTunes: A Netflix Acquisition?

They need that 12 petabytes for SOMETHING important.

iTunes currently controls 64.5% of the "video on demand" market. And they're getting ready to leap ahead of even that high bar. Storage Newsletter reports that the Cupertino-based company has just ordered 12 petabytes of storage from Isilon Systems. This extra space is specifically to help manage iTunes video downloads.

One petabyte is one thousand terabytes. For reference, Google processes about 24 petabytes of info every day. The Large Hadron Collider produces roughly 15 petabytes of data every year. James Cameron's Avatar famously took more than 1 petabyte of local storage to render its 3D CGI effects. In other words...Apple has just made a very significant purchase. And they must have equally significant plans for it.

It's worth noting that two million households in the US are expected to leave broadcast TV for the Internet in 2011. Services like Netflix, Hulu and- of course, iTunes are expected to benefit from this shift in a very big way. Together, Hulu Plus and Netflix are expected to rake in $800 million over the next two years.

Apple sees that big pie rolling towards them, and they want a slice. Or three. But their rivals in online movie sales are beginning to catch up. The Kinect's success has buoyed Microsoft's VOD storefront (currently #2), and other services like VUDU are fast making headway. Which is why Apple isn't exactly resting on their laurels.

Late last year, an analyst advised Apple to buy Netflix. While the subscription-based service still has a huge edge in video and movie rentals, iTunes is fast catching up. This big buy could be Apple shoring up their servers in preparation for a huge rush of Netflix content. That deal would cost Apple an estimated $12 billion. Which is well within the reach of their $50 billion war chest.

Is it a long shot? Hell yes. But stranger things have happened, especially when Apple was involved.

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