Netflix out-subscribes HBO in the US, takes on network TV

Fueled by its critically acclaimed "House of Cards" and "Orange is the New Black" series, Netflix has in effect become the fifth most-watched television network in the United States, BTIG media analyst Richard Greenfield told CNBC on Tuesday.

Each subscriber watches on average 93 minutes per day, Greenfield said, which makes Netflix "larger than any single cable network. If you looked at total minutes watched in a household … the only thing it has left in its sights is ABC, CBS, NBC, and Fox."

The company said it plans to double investments in original programming next year, when "House of Cards" and "Orange is the New Black" will roll out their second seasons.

"When you watch 'House of Cards' or 'Orange is the New Black,' you don't appreciate that you're watching digital or that you're watching television. It's just content ... that looks like it could be on whether it be AMC or FX or HBO or Showtime," Greenfield said in a "Squawk Box" interview. "They are starting from scratch in original programming and doing a lot better than anyone expected. And that's a large part of where the stock is at today."

Netflix shares soared more than 11 percent in premarket trading—following the after-the-bell release of earnings, subscriber growth, and forward guidance numbers that all exceeded expectations.

"Netflix is now larger than HBO domestically with 31 million subscribers. It looks like they'll be 33 million by the end of this calendar year," Greenfield said. But Netflix has only a fraction of HBO's international subscriber base.

During the Netflix video call that Greenfield hosted, "management talked about getting into some of the large [international] broadband markets," he said. "They are only in three of the top 10 broadband subscriber markets worldwide: the U.S., the U.K., and Brazil. They're not in big markets like France, Germany, Japan, South Korea, Russia."

"The implication from last night's call is that they are going to go into some of these very large markets versus like Scandinavia and the Netherlands where they have gone of the last six to nine months," he said, but added it remains to be seen if the original programming made in the U.S. will translate broadly around the globe.

"If you think international is never going to work, you should clearly be selling the stock." he said. "They are making a lot more money than they show on paper," choosing to take their DVD cash flow and their streaming cash flow in the U.S. and "plow it into building international."

Two years ago, Netflix stock was in the tank after the company abandoned that Quickster spinoff of its DVD business. Shares are now up more than 350 percent since then, attracting high-profile investors like Carl Icahn and Bill Miller.

In a letter to investors, Netflix CEO Reed Hastings wrote:

"In calendar year 2003 we were the highest performing stock on Nasdaq. We had solid results compounded by momentum-investor-fueled euphoria. Some of the euphoria today feels like 2003."

Said Greenfield: "We've been a huge bull on Netflix. We put a buy on it at $170 back in April. When it broke through $312 just in mid-September, we thought that valuation had gotten a little full. ... That's obviously 80 points ago" based on the stock price Tuesday morning. "There's clearly momentum here, but we thought it was a little too rich to be aggressively buying at these levels."

On Monday's call, Hastings said he was "hopeful" deals with Comcast (the owner of CNBC) and other pay television providers can be reached to offer his company's $7.99-a-month movie and TV streaming service through their set-top boxes.

"Remember most of the set-top boxes across the country … are not easily upgradeable," Greenfield said. "It's going to take long time to roll out, even if [Netflix] could get broad deals done.