Netflix Takes Content Cue From Cable

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The cast of 'Arrested Development,' portraying the Bluth family. Netflix plans to revive the series, but the number of new episodes hasn't been set.

Netflix Inc.'s plan to resurrect the cult television comedy "Arrested Development" highlights the way the DVD and video-streaming service is increasingly mirroring the programming mix on cable-TV channels, with a blend of reruns and original shows.

Netflix said late Friday that it struck a deal with studio Twentieth Century Fox Television and production company Imagine Television to be the sole U.S. outlet for the revived series, which is slated to return in 2013.
"Arrested Development," about the dysfunctional Bluth family, attracted rave reviews and a fervent fan base, but not one big enough to save it from cancellation in 2006, after three seasons.
The accord envisions bringing the show back for roughly 10 episodes, said a person familiar with the matter, though the cast and exact length of the run have yet to be worked out. Deals to bring back cast members haven't been completed, and the run could be longer or shorter than 10 episodes, this person said.
The plan could be risky for Netflix. While it isn't unheard of for a channel or platform to pick up a show that has been canceled, the return of a live-action series that has been off the air so long is "highly unusual," said TV historian Tim Brooks.

Netflix declined to comment on terms of the deal, or on anything about the production. Both Twentieth Century Fox Television, and Fox Broadcasting, which aired the original show, are units of News Corp., which owns The Wall Street Journal.

The deal reflects Netflix's continuing effort to improve the array of programming on its streaming-video service, which still offers mostly old movies and TV shows. It isn't the first time Netflix has commissioned an original series. The company said earlier this year that it will air 26 episodes of "House of Cards," a new drama featuring Kevin Spacey, starting in late 2012. It also has explored other potential deals for original shows, according to media executives.
The programming at most cable channels evolved in much the same way. The channels started with movies and reruns of TV series and then began commissioning original series.
"Our content-acquisition strategy is unchanged over the past few years: Add a broad range of movies and TV shows to the catalog for our members to watch instantly streaming from Netflix," said Netflix spokesman Steve Swasey. "That includes licensing original content."

The return of "Arrested Development" also shows how Netflix and its on-demand subscription service are funneling new revenue to shows that sometimes have limited appeal in reruns or syndication. Those programs include series whose plots follow closely from one episode to the next, such as the 1960s drama "Mad Men," which Netflix licensed from Lions Gate Entertainment Corp. earlier this year.

Reruns of such shows typically fetch less money from cable channels and local TV stations in syndication because they are difficult to watch out of order. But Netflix pays handsomely for them because its users like watching one episode after another on the service, media executives say, and that is changing studios' calculus.
"Arrested Development" has a similarly continuous narrative structure. Some jokes set up in one episode don't pay off until later episodes.
How much Netflix will pay for the show is unclear, but producers had been seeking as much as $3 million per episode, people familiar with the situation said.
There have been efforts to save "Arrested Development" since its cancellation, with talk of a movie surfacing repeatedly in intervening years. Recently, the producers behind the series, including creator Mitch Hurwitz, began pitching a limited run of new episodes leading up to a movie, according to a person familiar with the discussions.
Netflix's disclosure of the deal follows a months-long rough patch for the company. Customers rebelled after Netflix raised prices for a popular service by 60% in July, and then announced a since-aborted plan to spin off its DVD-rental-by-mail into a business called Qwikster in September.
The "Arrested Development" deal should provide a minor boost to Netflix, said Wedbush Securities analyst Michael Pachter, but it won't make up for the shows it will lose when its streaming deal with pay-TV channel Starz expires early next year.
So far, however, fans appear happy about the deal. Some took to Twitter to say "Great news!" and " the north face WOOOOOOOOO!"
—Lauren A.E. Schuker contributed to this article