Rumors continue to swirl around Netflix, Microsoft partnership

I suspect that the analysts over at Wedbush Morgan Securities are either smoking crack or that they’ve been living under a rock somewhere for the last six months. The IB had this to say about the Netflix, Microsoft deal.

“As we have speculated in the past, we believe that one of Netflix’s partners is Microsoft. We arrive at this conclusion based upon Netflix management repeatedly mentioning ‘Internet enabled video game consoles’,” said a Wedbush Morgan statement.

“While there are three such consoles, only one – Microsoft’s Xbox 360 – has a sufficiently large installed base to make sense from a streaming partnership with Netflix.”

“The competitive advantage of such an alliance is clear: Netflix customers who are Xbox Live members will have the ability to stream online content through their Xbox 360s directly to their televisions. The ability to do so is available without the Xbox 360, but requires a measure of technological sophistication and a high tolerance for failure,” it added.

So insightful. Thanks for telling us what we first heard about in February, WM.