NEW YORK ( TheStreet) -- Jim Cramer and I disagree on the notion that Microsoft (MSFT) should buy Netflix (NFLX). We don't see eye-to-eye on Reed Hastings' as a CEO. And we view the game of licensing streaming content from opposite ends of the table.
I get into this in Time Warner Punkslaps Netflix.
But at the heart of what really matters -- Microsoft becoming cool again and the future of how we consume content -- Cramer and I come together like two guys drinking a pint and watching the Leafs murder the Flyers after a long day on Wall Street.
On the Microsoft becoming cool again part, we agree completely. We just differ on how that will look within the context of television's future.The business of licensing third-party content is a bad one to be in. It's expensive. And, no matter who you are, you really do not have an edge against big media conglomerates ranging from Time Warner (TWX) to Comcast (CMCSA) to Disney (DIS). The brutal reality of this business has put Netflix into the financial mess it's in. Netflix should not be in the space. And it has basically tossed a "Hail Mary" pass with its feeble attempt to become anything that even resembles HBO.
The only reason why companies such as Google (GOOG) and Amazon.com (AMZN) bother with any of this is to extend their ecosystems. And, unlike Netflix, they a.) have meaningful ecosystems to extend and b.) the cash and core revenue lines to support the venture. For months, I have pummeled Microsoft CEO Steve Ballmer for bungling the obvious job of leveraging the wildly successful Xbox to take control of the living room.
It's not just gamers who own Xbox. Households comprised of individuals do. Families. It's Ballmer's fault for not branding Xbox as the all-in-one solution for living room and even whole-home entertainment for gaming, media consumption and an endless list of who knows what else. Blame Ballmer, not the consumer market, for pigeon-holing Xbox as nothing but a gamer's toy. If Microsoft should buy anything to give Xbox and its living room ambitions a kick in the rear, it should buy an excellent and far less expensive company called Roku. Roku represents the future from a strategic standpoint a whole heck of a lot more than Netflix does -- Reed Hastings' best attempts at spin aside.
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