Microsoft (NASDAQ:MSFT) knows that it can't own the living room without Hollywood's consent. 

Deadline Hollywood is reporting that CEO Steve Ballmer is in Tinseltown this week, meeting with producers, broadcasters, and agents to make sure that they buy into its Xbox One gaming console as the heart of home theater entertainment.

Google (NASDAQ:GOOGL) didn't get this right with the poorly received launch of Google TV, and it's these very negotiations that have reportedly held Apple (NASDAQ:AAPL) back from making its push into smart televisions.

In this video, longtime Fool contributor Rick Munarriz explains why it's a necessary step to make sure that Microsoft gets it right, but also why Hollywood needs Microsoft to get it right.