Netflix is now the most popular TV service in the US — here's why its lead is likely to only get larger (NFLX, AMZN, CMCSA, GOOGL)

• Netflix is the most-watched TV service among US consumers, topping even basic cable, according to a new survey by Cowen.
• But its lead is particularly pronounced among younger consumers.
• That's good news for Netflix and its investors, Cowen analyst John Blackledge said, pointing to it as a reason for raising his price target on the company's shares.

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Netflix is now the most popular TV service in America. And by the look of things, its dominance will only increase.

A plurality of US consumers say Netflix is the video offering they tune in most often, according to a new survey from Cowen's financial research group. They ranked the streaming giant ahead of not just digital rivals such as Amazon Prime Video and YouTube, but also the traditionally dominant TV services — broadcast and basic cable.

But Netflix's lead was even more apparent when Cowen focused on younger consumers — those aged 18 to 34. Among that group, Netflix not only was no. 1 among the most watched TV services, with nearly 40% of respondents picking it, but it had a nearly 23 percentage-point lead over YouTube, its nearest rival.

The survey "highlights the importance of Netflix in the home, particularly among millennials," Cowen analyst John Blackledge said in a research note on Tuesday. The company's huge and increasing investment in new and original shows and movies "likely ensures [it] the top spot in the living room over time," he added.

Citing the survey results as well as his new, more bullish forecast for Netflix's international business, Cowen raised his price target on Netflix's stock from $375 a share to $430. In recent trading on Tuesday, Netflix's shares were at $390.52.

In looking at TV viewership, Cowen surveyed 2,500 US consumers. Overall, 27.2% said that among all the services they watch on their TV, Netflix was the service they viewed most often. In second place was basic cable at 20.4%.

Those results were somewhat skewed by the large number of consumers who are either cancelled their traditional pay TV service or have never signed up for one. Together, those two groups accounted for 30% of total respondents to the survey.

Excluding those groups — among whom streaming services such as Netflix as likely to be especially popular — the streaming giant was no longer the most watched service. Instead, it fell to second place behind basic cable, but only just barely, indicating just how popular it is even among traditional TV diehards.

But the traditional TV holdouts are generally older than the rest of the population. Among younger consumers, Netflix's dominance is even more pronounced.

That bodes well for the company's future, as Blackledge argued.

SEE ALSO: Netflix dominates the US streaming market, but it may soon be an even bigger hit overseas

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