Netflix is re-creating the entertainment distribution model. Content creation is just an add-on to that (because existing Hollywood content is being priced out of reach as Hollywood wakes up to the threat Netflix poses, and global licenses are particularly tricky.) The goal is a single global streaming service, delivering the same content, everywhere, at the same time. Not only will this divert piracy but (more significant), it will reach a much larger population: new audiences worldwide who never had the inclination to pirate anything.
The goal is: Netflix is to entertainment delivery as Google is to search. Worldwide. Nobody is even close to them in global expansion, and that first mover advantage is going to become very handy when entertainment distribution (outside movie theaters, which will continue to be the home of the franchise blockbuster movie) is all streaming, delivered by a handful of global behemoths including Amazon, HBO, maybe Hulu, but Netflix will be above them all as the one standard service you've got to have, and then maybe you also get one or two of the others in addition.
Of course if Apple gets serious about a streaming service (as opposed to hardware), they could spoil the party pretty quickly, but so far they haven't made a move. Maybe they won't.
It's a smart investment. They are funneling their profit from US operations into overseas expansion. As a subscriber, I would rather they spend more $$$ on getting content for me. As an investor, I would rather they establish their brand globally as the Google of entertainment delivery. Greed wins over hedonism, so I approve of NFLX.
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