Netflix reported its Q4 ’15 and full year results yesterday, showing a second quarterly slowdown in U.S. subscriber growth, offset by accelerating international subscriber growth.

In Q4 ’15 Netflix added just 1.56 million subscribers in the U.S., down from 1.9 million in Q4 ’14 and below the company’s forecast of 1.65 million. It was also the lowest number of additions in 4 years. In Netflix’s letter to shareholders, it cited “high penetration in the U.S. seems to be making net additions harder than in the past” and new credit/debit card rollovers continuing to be a “background issue” (the latter was cited by the company as the main issue for the big shortfall in Q3 ’15). Both of these points were reinforced on the video earnings review call.

The slowdown in the past 2 quarters is a reversal from Q2 ’15 in which Netflix added 900K subscribers vs. 570K in Q2 ’14 and vs. its forecast of 600K. At the time I wrote that if the trend continued, it would suggest that Netflix had “bent” its S curve - defined the rate of adoption of a new technology over time. If Netflix had continued to accelerate U.S. subscriber additions beyond Q2 ’15 would have been extremely significant, given the law of large numbers headwind.

But with 2 more quarters now under its belt, it appears (for now at least), that this is not the case, and that in fact Netflix’s U.S. adoption rate is behaving as expected, which is to say the larger the company has grown in the U.S., the harder it has become to add net new subscribers. Of course the caveat here is that Netflix introduced a new variable into the mix in Q3, with the chip-enabled credit card replacements disrupting renewals. That explanation drew raised eyebrows though, so it’s impossible to understand just how significant it actually was.

Going into 2016, Netflix has forecast 1.75 million U.S. subscriber additions in Q1 ’16, down 23% from the 2.28 million it added in Q1 ’15. So clearly Netflix sees the slowdown continuing. On the earnings call, the company said the top 2 things it can do to drive U.S. subscriber growth was to get prospects excited about a specific program and to make it easy to sign up. It’s probably fair to say Netflix is about as easy to sign up for as can be, so that means increasingly original content is going to be the big determinant of Netflix’s growth rate in the U.S.

Why does all of this matter anyway? From my point of view it’s important because Netflix’s impact in the market ultimately influences the level of cord-cutting, cord-nevering and cord-shaving, especially among entertainment-only viewers (i.e. those that don’t care about sports and therefore have less use for a traditional pay-TV service). While Netflix has insisted it is a complement to pay-TV, the reality is that the better/more penetrated SVOD services like Netflix are, the more that some people will trade off expensive pay-TV services. That’s just common sense. So a slowing of Netflix’s adoption is ultimately a sliver of good news for pay-TV.

Putting the U.S. subscriber shortfall in context, Netflix more than offset it with faster international growth, adding 4.04 million subscribers in Q4 ’15 vs. 2.43 million in Q4 ’14.  And in Q1 ’16 it’s forecasting 4.35 million international adds vs. 2.6 million in Q1 ’15.  The extra growth is clearly stoked by the 130 country expansion announced at CES and comes just in time to offset the U.S. slowdown.

For many reasons Netflix is positioned to be the leading SVOD company in both the U.S. and globally for the foreseeable future. But the company is clearly going to be relying on international growth to support its stock market darling status. But there are many variables in the international rollout mix (content availability, marketing, payment systems, competition, etc.), making international growth less predictable than what occurred in the U.S. All of that, plus Netflix’s massive content investments means the next couple of year will be an interesting ride.