Netflix (NFLX 1.26%) is now in talks with the second-largest mobile company in the world, the telecom giant Vodafone Group (VOD -1.04%), to give its subscribers free access to streaming movies and television shows. This is just another step by Netflix to get its service into the hands of as many consumers as possible.

As for Vodafone, it's seeking more content to fulfill its ambitious plan of becoming a one-stop shop for customers who want entertainment. Just last year it finalized deals in the U.K. to allow free access to music streaming service Spotify and Sky Sports (owned by BSkyB) television for its customers.

The real story is Netflix
Netflix posted total earnings of $53 million for the first quarter, and this resulted in EPS of $0.86 per share. This was well above the income of $18.6 million and $0.31 per share that it posted in the year-ago quarter. However, its shares have fallen 10% over the last month.

The company's total revenue of $1.27 billion was in-line with the consensus and it added 4 million subscribers to beat the consensus of 3.85 million subscriber additions. Netflix's revenue grew by 24%, driven by its international sales. International sales were up 88% and they now make up over 20% of the company's total revenue.

After the company posted a very solid first quarter, management called for fiscal second-quarter earnings of $1.12 per share for the current quarter, which was above the consensus of $1.00 per share. Since the announcement, analysts have upped their expectations and they now expect earnings to come in at $1.15 per share.

Still a robust outlook
For the second quarter, Netflix expects to add 1.46 million new members. That's a slight slowdown from the first quarter, but a healthy increase from the 1.23 million members added in the same quarter of 2013. Despite concerns about the rising costs of content, Netflix's profit margin continues to expand.

Its contribution margin of 15.6% in the first quarter was more than twice that of the previous year. The company hopes to generate a positive margin in international markets during 2014, despite the fact that large investments will result in a net loss.

Why Netflix is beating out Amazon
Competition is always an important aspect in a market that's growing as fast as content streaming is. Amazon (AMZN -1.40%) has managed to build a huge movie library of more than 40,000 movies and TV shows for its Amazon Prime subscribers. It's also diversifying into hardware by launching its set-top box, Fire TV. The Fire TV is an impressive move to gain more traction in the streaming TV space, but Netflix appears to be in a better position when it comes to content. However, it's worth noting that Amazon recently inked a deal to stream some of HBO's top shows.

However, Netflix is having a lot of success with developing its own content. House of Cards was a major hit for Netflix, and it will soon launch the second season of Orange Is the New Black.

Netflix is also increasing its subscription costs in an effort to offset rising content costs. In July, it'll up prices by $1 or $2 a month for new customers. Current subscribers will only pay the $8 a month price for the next year or so.

How the shares stack up
Despite all of the great opportunities available to Amazon, it still looks expensive from a valuation perspective. Shares of Amazon are trading at a P/E of 72 based on the earnings estimates for next year. Meanwhile, Netflix trades at a 47 P/E ratio. It's worth noting that Amazon and Netflix have negligible debt.

Meanwhile, although it's not a player in the streaming business, Vodafone is still an intriguing investment. It trades at a P/E of just 11 based on next year's earnings estimates. It also offers an impressive 5.7% dividend yield.

Bottom line
The facts that Netflix will look to expand its content in 2014 and continue its expansion into international markets should keep its subscriber growth robust. For investors looking for a purer play in the streaming-content industry, Netflix is worth a closer look.