Netflix to become cable company to the world?

Netflix to become cable company to the world?

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International growth may triple the number of Netflix’s subscribers in the next six years, according to Credit Suisse, giving the online streaming and mail order entertainment company more


paying customers than all U.S. cable companies combined. Netflix AP With an on-demand platter of offerings and no need to adhere to local broadcast regulations, Netflix could ride the


broadband wave to 69 million subscribers by the end of 2016, according to Credit Suisse. Netflix had 20 million subscribers at the end of 2010, while the whole cable industry had 60 million


subscribers (and falling), according to SNL Financial. Comcast was the biggest basic cable provider with 23 million users, SNL data showed. “We believe Netflix’s virtuous cycle should extend


into international markets, following the promising start in Canada,” wrote John Blackledge, Credit Suisse analyst, in a note to clients Tuesday. “We believe there are roughly 167 million


addressable broadband subscribers in the top global markets (excluding China and Japan) that Netflix is likely targeting for expansion.” Netflix shares jumped more than four percent after


Blackledge raised his rating on the stock to ‘Outperform’ from ‘Neutral.’ At the end of this quarter, the analyst estimates the company will have as many as 900,000 subscribers in Canada


after only six months there. He originally expected 300,000 customers at the end of all of 2011. But despite its tremendous international growth potential, many investors continue to doubt


the company can afford the content acquisition costs needed to keep profits high enough to satisfy momentum players. Netflix’s growth so far has been driven by its easy-to-use interface, but


not the quality of its streamed movies. On top of the mobile offerings from cable companies, Netflix is bidding for TV and movies against new over-the-top players like Amazon and Facebook,


who face a relatively low barrier to entry. This is one reason why the stock is about 10 percent off its all time high reached in February. “They’re starting to have to pay for content,


which is going to drive up prices,” said Patty Edwards, partner at Trutina Financial. “And international growth means international content, and having to acquire that too.” * Halftime: 4


Market Movers to Watch * Pro Trader: Oil Could Be Breaking Out Credit Suisse estimates that total streaming costs, both domestic and international, will increase to three billion at the end


of 2016 from $1 billion at the end of this year. But if the number of subscribers triple as well, the firm believes margins will not suffer and will, in fact, expand. But investors doubt


whether that amount of spending will improve the content that its 2010 year-end $500 million expenditure now provides. Users complain the quality of the streaming content is below par


compared to cable, with many older cult films unavailable and new offerings featuring critically panned movies like Adam Sandler’s “Grown Ups.” Netflix has gone so far as to start acquiring


original content on its own, hinting at becoming more of a traditional “cable” provider. Last week, the company bought 26 episodes of the yet-to-be-made “House of Cards,” which will star


Kevin Spacey and be produced by David Fincher. “Kevin Spacey? Give me a break,” said Dan Nathan, founder of options site , who is bearish on the Netflix story, but acknowledges the


difficulty in shorting stock with such a momentum following. “The Netflix experiment, in my view can only end in one of two ways. The company gets taken out at all time highs for a


ridiculous multiple or the bear case finally plays out and investors come to their senses that the valuation and market cap make no sense given the competition that continues to nip at their


heels.” _For the best market insight, catch 'Fast Money' each night at 5pm ET, and the ‘Halftime Report’ each afternoon at 12:30 ET on CNBC. _


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to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; _Tim Seymour is Long (AAPL); Tim Seymour is Long (CCJ); Tim Seymour is Long (CSCO); Steve


Cortes is Long (TM); Steve Cortes is Long (GS); Steve Cortes is Long (CSX); Steve Cortes is Long (SDY); Steve Cortes is Long (SO); Steve Cortes is Long Crude Oil; Steve Cortes is Short (F);


Steve Cortes is Short (C); Steve Cortes is Short (UNP); Steve Cortes is Short (SPY); Steve Cortes is Short (DBA); Steve Cortes is Short Wheat; Steve Cortes is Short Soybeans; Steve Cortes is


Short Corn; Steve Cortes is Short CAD/USD; Steve Cortes is Short EUR/USD; _Joe Terranova is Long (C); Joe Terranova is Long (VRTS); Joe Terranova is Long (GS); Joe Terranova is Long (PNC);


Joe Terranova is Long (USB) ; Joe Terranova is Long (JPM); Joe Terranova is Long (UPL); Joe Terranova is Long (CREE); Joe Terranova is Long (MS); Joe Terranova is Long (PBR); Joe Terranova


is Long (BAX); Joe Terranova is Long (POT); Joe Terranova is Long (FCX); Joe Terranova is Long (CVE); Joe Terranova is Long (CVI); Joe Terranova is Long (SU); Joe Terranova is Long (TEVA);


Joe Terranova is Long (IBM); Joe Terranova is Long (BTU); Joe Terranova is Long (CNX); Joe Terranova is Long (XOM); Joe Terranova is Long (DIS); Joe Terranova is Long (MCD); Joe Terranova is


Long (RSX); Joe Terranova is Long (CNQ) _ _For Brian Kelly Accounts managed by Kanundrum Capital Are Long (EWJ) Accounts managed by Kanundrum Capital Are Long (MCP) Accounts managed by


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