Netflix, Inc. (NFLX) Looks to Hook Subscribers With “Arrested Development”

Netflix’s departure from TV’s traditional one-episode-per-week strategy has been well received by subscribers who have watched the service’s previous forays into original programming.

February’s release of “House of Cards,” a political drama that stars Oscar-winning actor Kevin Spacey, helped Netflix add 2 million more U.S. subscribers during the first three months of the year, more than analysts anticipated. “Hemlock Grove,” a quirky horror series, attracted additional viewers during the first weekend after its mid-April release, according to Netflix, although the company hasn’t provided specific numbers.

It’s difficult to quantify how many subscribers joined Netflix to watch “House of Cards” and then decided to stick with the service after seeing all the other material available. That’s because “House of Cards” debuted during a winter period that is traditionally one of the service’s prime times. For instance, Netflix added 1.74 million subscribers in the first three months of 2012. The difference between the two years could be an indication that “House of Cards” generated an additional 250,000 subscribers, although there is no way of knowing for sure.

In any case, “Arrested Development” is expected to attract even more new subscribers than “House of Cards” because of its built-in fan base and the success that several of its cast members have enjoyed since the show’s cancellation. The original cast, including Jason Bateman, Michael Cera, and Will Arnett, is returning to the zany series revolving around a family whose opulent lifestyle was torn apart by the arrest of a corrupt patriarch played by Jeffrey Tambor.

In the new episodes, viewers will get updates on the characters, one by one. Although that was done because of difficulties booking the actors all at once, it ended up allowing for a non-traditional viewing experience, one more fitting on Netflix than a traditional network. Viewers, for instance, will be able to pause an episode on one character to watch the same scene from another character’s vantage point.

The long-awaited return of “Arrested Development” prompted Netflix to be more optimistic about subscriber growth during the traditionally sluggish April-to-June period, Hastings told The Associated Press in a recent interview. The Los Gatos, Calif., company predicted that it could gain as many 880,000 U.S. Internet streaming subscribers during the second quarter. Without the series, Hastings said, the projected increase probably wouldn’t have exceeded 530,000, the growth it had during the same period a year ago.

If “Arrested Development” does as well as Hastings hopes, it will mark another triumph for a company that had fallen out of favor with subscribers and investors less than two years ago. Netflix infuriated customers in July 2011 when it announced price increases of as much as 60 percent for people who wanted to rent DVDs by mail and stream Internet video. Then, Hastings unleashed even more outrage by outlining plans to spin off the DVD-by-mail option into a separate service called Qwikster — an idea that seemed so absurd that it was mocked on “Saturday Night Live.”

Netflix didn’t waver on its new pricing system, even though it resulted in the loss of 800,000 customers at the time. But Hastings scrapped the Qwikster concept amid the backlash. The DVD-by-mail service, which has lost 6 million customers in the past 18 months and now has 8 million, is being allowed to slowly fade away.