Will Arrested Development on Netflix Pioneer a New Revenue Model for TV?

On August 26th, 2012 Liz Shannon Miller contributed a piece to gigaom that describes how the rebirth of the much-loved comedy series Arrested Development - this time new episodes will premiere on Netflix - just might "create a new business model for an industry that desperately needs it."

The original Fox TV version of Arrested Development was cancelled in 2006 during its third season. At that point, it seemed like 53 episodes might mark the end of the Bluth saga and the chicken dance. Now (August 2012) comes word that 10 newly produced episodes are set to debut on Netflix in spring 2013.

If the new Arrested Development succeeds on Netflix, Old World stalwarts will be quick to point out that the series first became popular thanks to traditional TV. And it's true that the burden of marketing an entirely new high-end TV series for an online subscription service has been an uphill battle... so far. But, as the internet matures as a platform for motion pictures, it makes sense that famous properties from the Old World will help to build audiences for the New. That's what happened when TV was the new technology back in the early 1950s. The first commercial successes on TV included several shows that had the marketing advantage of prior fame from the radio (e.g., The Guiding Light debuted on NBC radio in 1937 - adding a version on CBS Television in 1952).

Here's what Liz Shannon Miller says about the potential business significance of the rebirth of Arrested Development on Netflix:

"[I]t’s hard to imagine a more important signpost for the convergence of television and the web than Arrested Development. If it succeeds, it’ll legitimize a whole new distribution platform and business model. And if it fails, well, we’ll at least get to see Tobias in his cutoffs again. The TV singularity approaching us consumers of media is at times a scary one: We’re used to shows that cost millions an episode, but we’re also now used to consuming whatever we want, wherever and whenever we want. Some people think that going forward, these two mindsets won’t be able to co-exist. But Netflix seems to disagree, and the Bluths may be the ones to prove it."

In other words, if new episodes of Arrested Development prove profitable using an online subscription model, this may be the beginning of a whole new way of monetizing and experiencing TV.

Since 2007 (when Netflix first began offering motion picture streaming), viewers have become accustomed to binging on movies and past TV seasons online. Will the big new bet that Netflix is placing on Arrested Development - that enough "real TV money" can be earned from online subscriptions to support original high-end content - prove so successful that other producers will venture down the same path? Will Buster Bluth and his chicken-dancing sibling, Gob, pioneer an entirely new revenue model for original motion picture production? And, if episodes of a new TV show on Netflix (that can be watched whenever the viewer wants without commercials) succeeds, what does that mean for TV networks, TV schedules and the almost hundred year old advertising economy built around Old World broadcasting?

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