I’m not saying it could never happen or would certainly be a bad idea, but Apple’s services are built to take advantage of its hardware. Netflix is the opposite — it’s a service designed to be available on any device with a screen. With iTunes, Apple already has a library of movies and TV shows. If Apple wants to produce original content, they could start their own production company for a tiny fraction of Netflix’s $42 billion market cap. A fraction.
I don’t think it would be a good idea for Apple to buy Netflix, and not just because of the bad cultural fit. Apple doesn’t typically acquire the biggest player in the market. They usually go after smaller companies with strong, lean teams and good technology. Companies that could benefit from the exposure of Apple’s marketing.
Netflix is already too large to acquire and retains the baggage of their legacy DVD-by-mail service. As Gruber points out, it would become a huge distraction for Apple — pulling executives attention away from existing product lines. But they’re one of the few options in the market — Hulu, YouTube, and Amazon Instant Video being the other three.
I think, if Apple was to buy their way into this business, they’d go after a smaller company that most of us haven’t even heard of. Some startup with great technology, but very few content deals. But if nothing like this exists, they’re far more likely to roll their own service than acquire a big name like Netflix.