Seeking Alpha

Talks are underway with Netflix (NFLX) for another season of Arrested Development, says producer...

Talks are underway with Netflix (NFLX) for another season of Arrested Development, says producer Brian Grazer. AD's reboot, replete with an unconventional episode structure, has drawn a harsher response from reviewers than House of Cards. But from all indications, viewing activity has been healthy, and a recent Cowen survey found 28% of the show's viewers saying they're less likely to cancel their Netflix subscriptions because of it (the rest were indifferent).
Comments (24)
  • J. Sobes
    , contributor
    Comments (91) | Send Message
     
    House of Cards is an amazing show, what critics are dissing it?
    11 Jul 2013, 07:17 PM Reply Like
  • James Sands
    , contributor
    Comments (2376) | Send Message
     
    I was not surveyed. I thought that Arrested Development was terrible, watched one and a half episodes and didn't finish. We regularly watch seasons 1-3 which we greatly enjoy.

     

    Non of Netflix's original content has anything to do with why we will choose to keep the service. We keep it because it is dirt cheap.
    11 Jul 2013, 07:30 PM Reply Like
  • chriff
    , contributor
    Comments (91) | Send Message
     
    I felt the same way at first too. If you make it through even half the season, it will start to make a lot more sense. Having watched the entire season, I am starting to watch it again...and it's much better the second time around.
    11 Jul 2013, 07:50 PM Reply Like
  • James Sands
    , contributor
    Comments (2376) | Send Message
     
    chriff,

     

    Maybe we will not give up on it, but it was utterly disappointing, so we need more time to recover.

     

    Thanks for the advice.

     

    James
    11 Jul 2013, 07:52 PM Reply Like
  • Aceinmysleeve
    , contributor
    Comments (246) | Send Message
     
    I think that's a pretty common reaction. It takes a few episodes to get into the new season. Did for me as well.
    11 Jul 2013, 10:33 PM Reply Like
  • dingojoe
    , contributor
    Comments (302) | Send Message
     
    If you watch all the way through and then watch the first half again, it all makes sense and is actually pretty good, imho.
    11 Jul 2013, 10:45 PM Reply Like
  • mershaw2001
    , contributor
    Comments (111) | Send Message
     
    I'm not one to watch 6 or 8 episodes of TV just on the hopes that it gets better, and I imagine a lot of others aren't either. I really liked the first seasons of AD, and I even held a party to watch the new 4th season, but after the first episode we thought it was so bad that we just rented a movie. (since netflix didn't have any good movies that we hadn't seen either!)
    12 Jul 2013, 01:42 AM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1167) | Send Message
     
    The new Arrested Development was awful. I couldn't even finish watching it. That from someone that has watched all the old episodes many times over.

     

    Their much ballyhooed unconventional episode structure was obviously made so that they can save money filming. It seems that they filmed all episodes more or less at the same time.

     

    But the result is really bad. If they do pick up another season, they should bring the old fashioned one episode at a time structure back. And they should hire the old writers. The writing for the new episodes is just plain awful.
    11 Jul 2013, 07:32 PM Reply Like
  • jmodrkrk
    , contributor
    Comments (94) | Send Message
     
    yeah gotta agree - felt like a chore to watch, only did so because i felt like i should see it through for the old season's sakes.
    11 Jul 2013, 07:39 PM Reply Like
  • DIgitalMediaView
    , contributor
    Comments (668) | Send Message
     
    Two weeks after it's debut weekend, on June 10th, interest level in AD4 had dropped 90% (http://bit.ly/178q66C). Cowens subjective poll of 1k consumers is overwhelmed by this Internet-wide (US or global) objective data point--fans stopped searching for the program en masse within a few weeks after the TV event of the year had supposedly occurred. Consider this in light of the cost to NFLX to produce this brief burst of buzz followed by fan/critic disaffection. Industry sources say NFLX paid $35M for 10 episodes of AD4--for a 30-minute comedy. As a TV industry colleague of mine put it, "this is bananas." Almost all half-hour comedies cost less than $1.5M per episode to produce. How does another season of AD with these economics make any sense?
    11 Jul 2013, 07:51 PM Reply Like
  • James Sands
    , contributor
    Comments (2376) | Send Message
     
    Digital,

     

    Maybe there was tremendous uptick with AD1-3 as a result and these are the underlying numbers, j/k.
    11 Jul 2013, 08:39 PM Reply Like
  • lpcongas99
    , contributor
    Comments (129) | Send Message
     
    its netflix, its reed hastings the magician, economics do not apply, not until the next earnings report anyway, LOL
    11 Jul 2013, 09:24 PM Reply Like
  • jmodrkrk
    , contributor
    Comments (94) | Send Message
     
    weren't the episodes a full hour long?
    12 Jul 2013, 10:57 AM Reply Like
  • DIgitalMediaView
    , contributor
    Comments (668) | Send Message
     
    Episode lengths varied. Some were over 30 mins. BTW, I misstated the number of episodes. There were 15, but the production cost was $3.5M per. MN
    12 Jul 2013, 11:41 AM Reply Like
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    I watched House of Cards and it was pretty good but thought it was just okay (maybe the original British series was better). I thought that Hemlock Grove was going to be cheesy but for me it turned out to be an outstanding program. I had no interest in Arrested Development, though, but I think Netflix is making a smart move here in covering all the demographics.

     

    However I think Netflix is testing out a niche here sort of like local stations used to do with syndicated shows. Those shows still have huge fan bases so can draw numbers in, but the cost of content must be much cheaper than many of the flagship shows.

     

    Maybe they can bring back Firefly or Caprica or some other cult shows.

     

    People slam Netflix for lack of content but personally I've found the undiscovered films to be the very best part of the service. I'd rather watch some obscure foreign film with an original twist over any of the formula Captain Americas any day.

     

    I'm an oddball though so I'm sure their marketing analysts are figuring out what the majority of the user base actually wants.
    11 Jul 2013, 08:13 PM Reply Like
  • James Sands
    , contributor
    Comments (2376) | Send Message
     
    I agree with you on Netflix's value based on the magnitude of available content. And with an $8/month price the deal is tremendous.

     

    However, this isn't going to be something my baby boom generation parents will ever substitute from a satellite or cable subscription (my Dad cannot live without SiFi network).

     

    Down the line 20-30 years, the environment is going to be completely different and not just with content preferences, but with car ownership, home ownership, etc.

     

    Anyways, good points.

     

    James
    11 Jul 2013, 08:38 PM Reply Like
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    Good points James. I am eagerly waiting for Intel's solution, but seems they are still stuck in negotiations with content providers.

     

    My Holy Grail would be Netlix for streaming and then Intel for sports and things like SyFy and History channel, since I don't have an interest in the other 100 channels anyway.

     

    Although it looks like Intel isn't going to be able to offer that a la carte option where you can pick the exact channels you want, but it will be a lot more personalized than typical cable/satellite offerings.
    11 Jul 2013, 08:45 PM Reply Like
  • James Sands
    , contributor
    Comments (2376) | Send Message
     
    Derek,

     

    Here's a fairly quick read of my take on the potential for media company-based a la carte if you are interested:

     

    http://bit.ly/10PPPQ2

     

    I'll give you the gist if you want to pass. I basically think that companies like Discovery, Disney, Viacom, Time Warner, Comcast (via NBCUniversal), 21st Century Fox are in positions to create direct streaming products for subscribers to their content, which would be substantial. While we'd probably still have to subscribe to their suite of networks, broadcasts, and filmed entertainment, it would give some interesting options, and lead to consolidation of the Scripps Networks, AMC Network, A&E Network, Starz, etc.; in my opinion.

     

    Thanks for your points.

     

    James
    11 Jul 2013, 08:54 PM Reply Like
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    Awesome article James, I read the whole thing, it's very forward thinking staying ahead of the curve.

     

    I had no idea Discovery Communications was raking in so much revenue.

     

    I noticed that Disney and Netflix have signed a content deal. I would be willing to pay a few extra dollars a month if Disney's huge sports providers gave access to Netflix subscribers though live feeds.

     

    Disney is really firing on all cylinders so it's smart of you to note them as a huge player. They seem to be gobbling up all the right content.
    11 Jul 2013, 09:06 PM Reply Like
  • James Sands
    , contributor
    Comments (2376) | Send Message
     
    Thanks Derek,

     

    I could see ESPN command $10-15/month with a subscription model to anyone across the globe. If ESPN were able to grow up to 150 million global subscribers over time, at $10/month they'd be making $18 billion a year not including advertising, and $4 billion more than their most recent TTM.

     

    This is why I think major cable networks can eliminate the "third-party revenue" from the Comcasts, Dish Networks, DIRECTVs, Time Warner Cable, etc.

     

    Disney is a pretty amazing company as you mentioned.
    11 Jul 2013, 09:13 PM Reply Like
  • Aceinmysleeve
    , contributor
    Comments (246) | Send Message
     
    Yeah I agree. ESPN is a powerhouse. I've been imagining all the kinds of things they could do with sports if they added internet functionality (pick your own camera, choose your own broadcast production team, fantasy integration, stats mode, and so on).

     

    Have you looked at DVD economics in a similar fashion. If Netflix had 50M subscribers and could eek out 5$ more for them that's half the current revenue from DVDs I believe. In other words, why not shut down that window and open it up to SVOD? It almost seems plausible to me.
    12 Jul 2013, 12:06 AM Reply Like
  • James Sands
    , contributor
    Comments (2376) | Send Message
     
    Ace,

     

    Just so I understand your concept, you are suggesting that Netflix use its existing DVD library and create a product @ $5/month to subscribe to this library on demand? Would this be a streaming service or through a third-party distributor?

     

    @ 50 million subscribers we are talking $3 billion in annual revenue.

     

    I don't think Netflix has the contractual ability to directly do this.

     

    It will also be interesting to see Netflix's penetration based on the U.S.'s roughly 70 million broadband lines.

     

    Competitive landscape may be changing for younger generations too: http://bit.ly/10Qf0Sl

     

    Check out the demo: http://demo.tivli.com
    12 Jul 2013, 01:42 AM Reply Like
  • vireoman
    , contributor
    Comments (1069) | Send Message
     
    A dissenting opinion here: I thought House of Cards started out really strong, with the deliciously evil Spacey character, but became all-too conventional as the series progressed. While I enjoyed it compared to the viewing alternatives at the time, I don't care if it comes back. As for Arrested Development, I found it to be every bit as good as the original, and eagerly anticipate using my friend's password to watch more episodes in the future.
    11 Jul 2013, 09:40 PM Reply Like
  • Gary J
    , contributor
    Comments (5592) | Send Message
     
    House of Cards was a huge hit. Arrested Development "viewing activity has been healthy". Pretty much what I need to know. Thanks.
    12 Jul 2013, 07:21 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs