ImagesNetflix (NASDAQ:NFLX)

There was at least one notable investor taking advantage of the sharp drop in the shares of Netflix (NASDAQ:NFLX) last week. Mark Cuban -- the Shark Tank star and owner of the Dallas Mavericks -- revealed that he took advantage of last week's drop to buy 50,000 shares of the leading premium video service. He also sold puts, increasing his beneficial exposure to the stock's potential rise. 

Cuban's move came after the stock took a beating following last week's disappointing third quarter results. Netflix closed out the period with 53.06 million streaming subscribers worldwide, well short of the 53.74 million that it was targeting earlier in the summer. Netflix believes that the shortfall happened as a reaction to the service's springtime rate increase, going from $7.99 a month to $8.99 a month for new users. It didn't have an early read on the negative trend given the initial strength of signups tied to the second season of Orange Is the New Black.

The market didn't like the news, sending Netflix stock 21% lower last week. However, that was apparently a dinner bell for Cuban.

Cuban is brash, polarizing, and swagger incarnate, but he knows a thing or two about the Internet industry. He became a billionaire after selling online media pioneer Broadcast.com in 1999. In other words, he's probably more in tune with what's happening at Netflix than most lay investors.

His argument is that Netflix is the top dog in a disruptive niche, and that comes with network effect advantages when it comes to procuring content. 

"The one company that always comes up is Netflix. Very little content is being created in the United States -- and I think it's going to extend internationally -- without someone talking to Netflix to see if they're interested in investing in that content first or distributing that content," he said on CNBC on Wednesday morning. 

He's right. If you want a streaming deal why wouldn't you want to team up with the company that dominates the global marketplace with more than 53 million subscribers? It's not just about the reach, though naturally content producers want to see their labors of love put before the largest audience possible. There also isn't a company that is likely to pay as much as Netflix on a consistent basis. No one out there has 53 million Web-based subscribers -- and a projected 57 million by the end of December -- to divide content acquisition costs into. Netflix's size allows it to have $8.9 billion in streaming content obligations.  

The model works for consumers. It works for content creators. More importantly, it's a scalable model that works for Netflix. Even with last week's lousy quarter we saw revenue soar 27% with operating profit and net income soaring 93% and 86%, respectively.

Coming up short on subscriber targets is going to bring out the worst in skeptics. Folks will begin to wonder if Netflix is saturating the market. Then again, many of these same boo birds thought that Netflix's reach would top out at 30 million or 40 million accounts. At the end of the day, did another service gain more than 3 million premium streaming subscribers sequentially? Didn't the competition shrink farther away in the rearview mirror? 

The living room is changing, and Netflix is still the one in the driver's seat. 

Rick Munarriz owns shares of Netflix. The Motley Fool recommends Netflix. The Motley Fool owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.