BARCLAYS: Google search data has a 'very high correlation' with Netflix's US subscriber growth

Netflix

Aziz Ansari in "Master of None."

• Google search data on Netflix has shown a "very high correlation" with Netflix's US subscriber growth, according to Barclays.
• The firm found that domestic Google Trends data on the word "Netflix" in one quarter tended to be predictive of Netflix's growth in subscriptions for the following quarter.

If you're looking to forecast Netflix's growth over time, you might look to Google Trends for answers.

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Google search data on the streaming service has shown a "very high correlation" with Netflix's subscriber growth in the US, according to a report distributed Thursday by Barclays analysts led by Kannan Venkateshwar.

The firm found that domestic Google Trends data for the word "Netflix" in one quarter tended to be predictive of Netflix's growth in subscribers for the following quarter.

Barclays

While Barclays found the relationship between Google Trends and Netflix subscriptions to be "quite stable over time" in the US, the firm did not find the same level of correlation in international search data at this time.

Barclays attributes this discrepancy to Netflix's international audience still being at an "early stage" in development, and the firm estimates that a similar search correlation will develop over time as Netflix continues to grow internationally.

Netflix is set to announce its earnings for Q4 2017 on January 22, and subscriber growth has historically been the metric that investors focus heavily on.

In Q3 of 2017, the company grew from 103.95 million worldwide subscribers to 109.95 million, blowing past growth targets. Over the same period in the US, Netflix grew from 51.92 million subscribers to 52.77 million, again well ahead of estimates.

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