Netflix, Inc. (NFLX)’s Key Advantage, In Detail

And now the story of how network television failed to capitalize on a well-made program that attracted a small but passionate viewership. It’s Arrested Development, and it’s back on May 26 on Netflix, Inc. (NASDAQ:NFLX).

Hollywood had a problem with Michael Bluth. After three seasons of inside jokes, smart storytelling, and real and imagined courtroom drama, in 2005 News Corp. unit 21st Century Fox canceled Arrested Development because of declining ratings.

But now Netflix is bringing back the Bluths, similar to how it revived The Killing in a cooperative deal with AMC Networks Inc (NASDAQ:AMCX) and Fox Television. Netflix, Inc. (NASDAQ:NFLX) gets exclusive streaming rights to Season 3 episodes three months after the finale airs on AMC Networks Inc (NASDAQ:AMCX).

Source: The Verge.

Let’s be clear: This isn’t just Reed Hastings demonstrating good taste. On Netflix, Inc. (NASDAQ:NFLX), subscribers devour these niche shows with the same gusto I bring to a fresh box of steaming hot New York pizza. Here’s a list of the top 10 rated shows on Netflix, Inc. (NASDAQ:NFLX) according to IMDB:

Show IMDB Stars (out of 10) Netflix Stars (Out of 5) Total Ratings on Netflix
Breaking Bad 9.4 4.4 3,990,431
Arrested Development 9.2 3.9 5,263,197
Firefly 9.2 4.3 2,843,553
Sherlock 9.2 4.5 1,672,152
Twin Peaks 9.0 3.9 784,064
Freaks and Geeks 9.0 4.4 412,106
Downton Abbey 8.8 4.5 1,508,046
Mad Men 8.7 4.1 2,897,300
Parks and Recreation 8.5 4.0 1,852,378
Terriers 8.3 4.0 113,096

Sources: IMDB, Netflix.

Notice anything? If you said, “Wow, this list is filled with great shows stupidly canceled early by network executives,” you win our coveted no-prize.

Firefly and Twin Peaks, notably, are among the most famous shows to be canceled before they could become something more. Terriers lasted just 13 episodes, while Freaks and Geeks got 18. Fans were outraged enough by the early demise of Joss Whedon’s Firefly that Universal made a film, Serenity, to close the open plotlines. It wasn’t a commercial success.

Yet like a digital island of misfit toys, Netflix, Inc. (NASDAQ:NFLX) gives these gems a home. That’s a huge advantage, since resurrecting the dead usually costs less than creating something new. (At least when it comes to TV shows.) Having a fan base at the ready also helps.

Look at the Bluths: 5 million are awaiting their return, according to the table. Arrested Development attracted just 4 million viewers, on average, in its third season. Netflix, Inc. (NASDAQ:NFLX) is already poised to do better with the show than Fox did.