Netflix to Become Cable Company to the World?

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 provider more paying customers than all U.S. cable companies combined.

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 streaming offerings.

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, President of Trutina Financial. "And international growth means international content, and having to acquire that too."

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 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 RiskReversal.com, 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."

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John Melloy is the Executive Producer of Fast Money. Before joining CNBC, he was an editor for Bloomberg News, overseeing the U.S. Stock Market coverage team.