Late Friday, Netflix announced that they had struck a deal with 20th Television and Imagine Television to create new episodes of ARRESTED DEVELOPMENT beginning in 2013.  This could have huge repercussions across the board.  Netflix assuredly hopes that this makes people forget about their recent mis-steps and Hulu has got to be wondering how they missed getting a seat at the table. Does it also get messy when formats and structure change to enable the best streaming experience?

Over the past few months, the murmurs had been growing that there would be a feature version of ARRESTED DEVELOPMENT with a limited series of sorts to lead up to its release.  The fan base for the show is strong and had been clamoring for something like this for some time.  The show does well on DVD and via streaming because of that fan base and the fact that the rest of the sitcom universe caught up to what AD was doing years ago.  When the show came out, there were few single camera sitcoms and the type of comedy was more “mature” than most – not in terms of the M rating for nudity, language and such, but just perhaps more cerebral.  Now, there are at least a half-dozen shows on broadcast and cable that carry the same tone and style finding high ratings and an enlarged fan base.

Image Credit: Everett Collection

Are there other shows that might have been ahead of their time that could find a second life on streaming sites?  Perhaps there are, but wouldn’t it have to be considerably different in this new form?  On FOX, AD had the standard three act structure to allow for commercial breaks. Does it change when it no longer has to work on the structured timing of act breaks for commercials? Does it even keep to a 22 or 24 minute length like on broadcast for streaming or does it get shorter or longer?  Do they have the budget to create episodes like they used to?  Of course, a lot of this has to do with the terms of the deal (which we don’t know yet) but I can’t imagine it will be the same as it was – with a cast whose rates have risen since they were last on the show.  I can’t imagine that Netflix would add commercials in there as this would be part of their premium offerings.

Netflix seems to be trying to follow the lead of HBO when they started creating original content in order to generate more subscribers.  It worked so well for them that other premium movie channels followed suit.  The latest is Starz – now headed by Chris Albrecht who was the architect of the original content movement at HBO more than two decades ago.  Netflix had already committed to 26 episodes of HOUSE OF CARDS starring Kevin Spacey.  It’s a remake of a 1990 BBC miniseries about British politics – but they’ll change the locale to the US.  In neither case has the licensing terms been made available, so we won’t know what the creative execution will look like until late 2012 – when HOUSE OF CARDS premieres.

Another element of the messiness is the fact that Hulu is supposed to be so closely tied to 20th Television through their parent, News Corp.  We still don’t know if they were even at the table offering such a licensing deal, but this could end up to be like egg on the face if it helps push Netflix that much further ahead as a streaming content destination.  The act of a studio placing shows on a competitor’s network or outlet is certainly nothing new – it is done all the time and effectively acts as a counter-balance.  Years ago, ABC decided to allow CBS to air the new show CSI because it meant that the financial risk was minimized.  It ended up to be huge for CBS, but it has also made huge amounts of money for Disney. But, those financials were different and it was not in an environment of competition where the stakes are whether your outlet (HULU, Netflix, etc.) will survive if people stop going there.  For all intents and purposes, the financial model is completely up in the air. A show like ARRESTED DEVELOPMENT would be a huge platform for any video site – Netflix seems to have won this battle.

Ultimately, it will take quite a long time to figure out whether this was a smart deal or not. Two years are an incredibly long time in this environment.  Who knows what form Netflix will be in by then? whereas TV provides the opportunity to think in 24 month increments (or longer), the digital pace is much quicker than that.  It could be even more messy if the financials are skewed further in one party’s favor by the time the episodes are produced.  In theory, I think that Netflix’ strategy is a sound one using the model of premium cable.  Except, the world is changing so much – so quickly – that this time horizon may be too long to be succesful.  It will be interesting to see if it ever really comes to fruition or if it just becomes another messy lesson in streaming.  Only time will tell, and 2013 might be too long in this environment.