Investors considering Netflix's (Nasdaq: NFLX) potential in growing beyond its current 20 million subscribers may want to pack a passport.

Piper Jaffray's Michael Olson raised his price target on the leading movie rental service -- from $240 to $280 -- encouraged by Netflix's opportunity to grow its popular streaming service abroad.

It was easy to be skeptical when Netflix rolled into Canada back in September.

  • Would Netflix work as a streaming service with a limited digital catalog?
  • Would subscribers come despite the lack of DVDs and Blu-ray discs?
  • Canada has tiered broadband pricing. Would a digital smorgasbord pan out in a metered country?

The answer has been "yes" on all counts. Netflix expects to surpass a million subscribers in Canada this summer and is eyeing additional expansion markets.

Olson surveyed residents in the four countries likely to be on Netflix's shortlist: Mexico, Brazil, the United Kingdom, and Germany. A third of the respondents were familiar with Netflix with more than half of them already owning devices capable of streaming through home theaters. To be fair, Olson's survey consisted merely of 50 participants from each of the four countries. In other words, this isn't all that scientific. However, Canada's success after an initial hiccup is laying out the roadmap for expansion.

It won't be a cakewalk. (Nasdaq: AMZN) is already a force in Europe after its Lovefilm acquisition, and the world has seen Netflix take this country by storm as the competition laid largely dormant for four years. There will be local favorites, and Amazon, Apple (Nasdaq: AAPL), and Google (Nasdaq: GOOG) are unlikely to let Netflix hog all of the streaming fun abroad. Just because Apple has never expanded beyond piecemeal purchases and rentals and Google's YouTube is the world's top free video-sharing website doesn't mean that models won't be tweaked if they can beat Netflix to the punch in an important territory.

They better hurry, though. Netflix has a passport, and it's apparently not going to be afraid to stamp it.

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