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Wall Street’s consensus estimate for Netflix ( NFLX ) domestic subscriber growth this year appears too aggressive, ITG Investment Research analyst Corey Barrett said in a report Monday. International subscriber growth estimates, on the other hand, look conservative, he said. “The net effect of slowing domestic churn improvements and gross addition velocity is likely to drive domestic streaming net subscriber additions below consensus in 2016,” he said. ITG is modeling Netflix to add 4.4 million U.S. subscribers this year, vs. the consensus estimate of 4.8 million. For 2017, ITG forecasts Netflix to add 3.8 million domestic subscribers, vs. consensus views of 4.5 million. Also, the percentage of Netflix domestic gross subscriber additions that have had the service before increased to 65% in Q4, up from 55% in Q4 2013. The pool of “Netflix-nevers,” people who have never been Netflix subscribers, is rapidly shrinking, he said. But Netflix’s international growth prospects are underappreciated, Barrett said. ITG predicts that Netflix will add 15.6 million net new international subscribers in 2016, above the consensus estimate of 14.4 million. For 2017, ITG expects Netflix to add 15.4 million international subscribers, vs. consensus views of 14.5 million. “We believe the company can leverage the scale advantage and apply the content expertise it has domestically to its international markets, creating a significant competitive advantage in international markets,” Barrett said. “We view Netflix as the future of global video distribution, but believe Netflix is more likely than not to fall short of investor expectations for 2016 subscriber growth.” Netflix ended 2015 with 74.76 million streaming video subscribers worldwide. Of those, 44.74 million, or 60%, are in the U.S. Netflix is having a big impact on the traditional TV business in the U.S. Last year, Netflix accounted for about half of the overall 3% decline in TV viewing time among U.S. audiences, according to a new study by Michael Nathanson of MoffettNathanson, Variety reported . RELATED: Surveys Show Netflix Winning In U.S., Slow Going In Japan . Scalper1 News
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