Dronamraju Ravi Prakash

Netflix announced recently that they expect to reach 5M subscribers in 2006, a year earlier than anticipated. In addition, they expect to have 3.85M to 4.05M subscribers by the end of this year (2005). This stock had a solid run-up in the last 2-3 months, jumping up t0 25$. I started wondering if i should exit. Market cap reached 1.34B. At a year end customer number of 3.85M, the market is paying about 350$/customer up from 250$ in dec 04 (refer this). The valuation is creeping up, but that's a reflection of the acknowledgement that netflix is indeed winning the battle.
The question to be asked though, what is a netflix customer worth to it's investor. Should we be ok with paying 500$/customer? 500$/customer and 5M customers = marketcap of 2.5B. That's a healthy 40% jump from here. On the other hand, 5M customers at 250$/customer is only 1.25B, a downside of ~8%