In the social media era, when reputation and buzz are everything, networks, advertisers, and new players like Netflix are taking bigger gambles on smaller shows and rising stars. Inside the new data-driven, hyper-social, actor-friendly rules of great television

Netflix Resurrected Arrested Development. Next Up: Television Itself

  • By Willa Paskin
  • 6:30 AM

The New rules of the Hyper-Social, Data-Driven, Actor-Friendly, Super-Seductive Platinum Age of Television:
Rules 9 & 10

Illustration by LAMOSCA

Arrested Development is shooting for the first time in seven years and the Bluths are having a bad day. Gob Bluth, disheveled in a tuxedo, a shiner under his left eye, flops down in a seat in a police station. His ambiguously straight ­brother-in-law, Tobias Fünke, also in a tux, walks over and says, “You look like I feel.” “Gay?” Gob replies, genuinely confused. The actors on set this morning—Will Arnett, who plays the dashing, self-destructive magician Gob; David Cross, the married but sexually confused Tobias; and Michael Cera, sweet George Michael—are chatty and in good spirits, bantering right up to the moment the camera starts filming. Just as they are about to start the scene again, Cross, joking, asks for a break. Arnett shoots back, “We got nothing but time and money!”

When we last saw the Bluths, in 2006, nothing could have been further from the truth. The critically adored but ­little-watched show about the wacky, white-collar-criminal Bluth clan had just been canceled because of chronically low ratings. Arrested Development, it seemed, was too dense to win a mass audience, its deeply flawed characters too unlikable, its layers of jokes too tightly packed for the casual viewer to penetrate. It won Emmys and other accolades, but it was the kind of show you couldn’t join midway through a season unless you enjoyed the sound of in-jokes whizzing over your head. It was just not made for TV, at least not as it existed in the mid-2000s.

But over the intervening years, something happened: TV changed. Net­flix went from a DVD-by-mail service to a purveyor of online streaming video—most of it television. Binge-­watching—churning through mul­tiple episodes at a time—became a national pastime. The very qualities that made Arrested Development such a hard sell on network TV—its complexity, depth, layered blink-and-you’ll-miss-it humor—made it perfect for this new era, in which obsessives can watch and rewatch their favorite shows whenever and wherever they feel like it. On Fox, Arrested Development would set up a joke in one episode and pay it off three weeks later; on Net­flix the joke would pay off in an hour and a half. When ­people say Arrested Development was ahead of its time—something the show’s staff is as likely to say as its fanboys are—they’re really saying that it was ahead of Net­flix.

SECRET WEAPON
  • Allison Jones

    Casting Director

  • Known for
    Casting TV series like Freaks and Geeks, Arrested Development, The Office, and Veep, as well as films like The 40-Year-Old Virgin, Knocked Up, and Bridesmaids.
  • Notable casting moves
    Jason Segel, Seth Rogen, and James Franco in Freaks and Geeks; Emma Stone in Superbad; Rebel Wilson in Bridesmaids; Courteney Cox and a 7-year-old Joseph Gordon-Levitt in Family Ties.
  • Films cast 33
  • TV series cast 28
  • Emmys 8 nominations, 1 win

Portrait illustrations by Sonia Yeck

Netflix isn’t just rebooting Arrested Development—it’s revolutionizing TV.

So when Arrested Development creator Mitch Hurwitz decided to listen to his fans and revive the series, Net­flix was interested. It was just beginning to develop its own original programming and was willing to pay up for marquee content. It outbid Showtime for the right to revive the show; it agreed to pay about $3 million per 30-­minute episode, about as much as it costs AMC to make an entire hour of Breaking Bad. In May Net­flix will release all 14 new episodes of Arrested Development at once.

It won’t be the company’s first foray into high-profile programming—its mobster-in-Norway dramedy, Lilyhammer, debuted in 2012, David Fincher’s House of Cards arrived in February, and ­torture-porn auteur Eli Roth’s werewolf saga, Hemlock Grove, will come out on April 19. Orange Is the New Black, a women’s-prison series by Weeds creator Jenji Kohan, is due this summer.

But those are all fairly traditional in structure. Arrested Development is exploring the more playful, outré structural possibilities offered by the new platform on Net­flix. Each episode will cover events from a different character’s point of view, like a com­edic Rashomon. There will be moments and Easter eggs that will make sense only in retrospect. There will be a suggested viewing sequence, but it will be pos­sible—even rewarding—to watch out of sequence. Cross describes the new structure as being “like if you could mash up a Venn diagram with a nautilus shell. And then put that inside a Möbius strip.”

Hurwitz may not have all the time or money in the world, but he does have unprecedented freedom. Because Net­flix doesn’t have to worry about commercial breaks or time slots, he can make episodes of variable lengths that can run in any order. (He even briefly considered designing the new season as a choose-your-own-­adventure story.) He can make television built to be binged. “In its purest form,” he says, “a new medium requires a new format.”

Ten years ago netflix was a fledgling DVD-by-mail business, trying to take over video rentals one red envelope at a time. It began streaming video only six years ago, when most of its attention was focused on ­trouncing Blockbuster. It was just two and a half years ago, in December 2010, that Net­flix began to invest more resources into its streaming than its mail service. And a year and a half ago, CEO Reed Hastings’ aborted idea to spin off his company’s DVD arm into something called Qwikster resulted in outrage, mockery, the loss of 800,000 customers in one quarter, and a catastrophic drop in stock price. Today three times as many ­Americans subscribe to Net­flix’s streaming service as to its DVD-by-mail offering, and about 70 percent of what they watch is television. Overall, 33 million subscribers stream more than a billion hours of Net­flix content every month, using one-third of peak US bandwidth to do so.

Streaming will one day make DVDs obsolete. But for now Net­flix loses money every time it converts a DVD renter into a streamer. Thanks to the high cost of licensing content and delivering streams, Net­flix makes a profit of just about $4 per quarter off each US streaming customer, versus about $15 from every DVD subscriber. For Net­flix to thrive, it needs to increase the number of customers who are paying that less profitable rate. But with more rivals entering the fray, competition is fierce. Apple, Amazon, HBO, Hulu, Sony, Microsoft, and Intel are all now bidding for the same content and eyeballs that Net­flix is. And so Net­flix faces a quandary—how can it distinguish itself to attract new subscribers and retain existing ones?

To answer that question, the company is taking a page from HBO, Showtime, AMC, and nearly every other prestige cable company that has emerged over the past decade. Those channels began by airing movies. Then they began paying for higher-­quality movies. Eventually they started making their own TV shows. The strategy paid off: In 1999, the year The Sopranos launched, HBO had 24 million subscribers; in 2007, when the series ended, it had 29 million. In 2008 Showtime elected not to renew several film deals and began investing heavily in original shows. Since 2009, on the strength of series like Homeland, its subscriber base has grown from 17 million to 22 million. Hoping for similar results, Net­flix is investing about $300 million in original programming over the next three years, 5 percent of its $6 billion content budget for that period.

SECRET WEAPON
  • Otto Berkes

    Chief Technical Executive, HBO

  • Known for
    Being wooed away from Microsoft by HBO, which created an entirely new position for him. Overseeing HBO Go, the video-streaming service that’s nabbed over 6 million registered users.
  • 5-second bio
    Age 50. One of four creators of the original Xbox. Holder or coholder of nine patents, ranging from touch-based UI to low-power computing. Architect of the ultramobile PC, a forerunner to today’s tablets.
  • What’s next
    Overseeing the launch of a new software lab in Seattle devoted to making HBO Go even more robust.
SECRET WEAPON
  • Bear McCreary

    Composer

  • Known for
    Scoring Battlestar Galactica, The Walking Dead, Eureka, and Terminator: The Sarah Connor Chronicles
  • 5-second bio
    Age 34. Graduated from USC’s music school and worked with the legendary film composer Elmer Bernstein, who earned 14 Oscar nominations.
  • Series scored 15
  • Emmy nominations for shows he’s scored 40
  • Personal Emmy nominations 1

The more that ­people binge-watch, the more attached they become to a show.

By creating original series, these cable companies weren’t just getting more subscribers; they were getting more loyal subscribers, who couldn’t imagine life without the latest episode of Game of Thrones or Homeland. That’s been a problem for Net­flix, says media analyst Richard Greenfield. “There are lots of ­people trying its service every year, yet lots of ­people turn off,” he says. “The best way to make its service stickier is to create high-quality programming that ­people want to access on a regular basis.”

Net­flix has something that not even HBO’s market researchers can compete with: years of near-­perfect data on what its subscribers watch and like. Netflix has already tapped into that information to pick new projects. “When we heard about a remake of House of Cards, our ears pricked up because of our own knowledge of the original,” says Ted Sarandos, Net­flix’s chief content officer. “Our data showed that there were a lot of ­people who watched it over the years. And certainly when you start layering in the pools of fans of David Fincher, of Kevin Spacey, of political thrillers—all of a sudden you’ve got a very large addressable market.” (Net­flix also uses that data to target its marketing. If you love films with strong female leads, it will likely market House of Cards to you with images of Kate Mara and Robin Wright.)

That helps explain why all of Net­flix’s new shows are based on pre­existing television and books: They are at least ­somewhat-known quantities, so the company has a better sense of how its customers will likely respond to them. It also explains why, as polished as Net­flix’s new series are, they all sound relatively familiar—political thriller, female drama, Arrested Development—and why Net­flix has been in discussions about reviving pre­existing series like Terra Nova and The Killing. These shows match customer tastes and can be slotted into existing genres—more precisely, the categories on Net­flix’s site (“goofy comedies,” “critically acclaimed cerebral foreign dramas,” “quirky procedurals with a strong female lead”). The company is serious about making excellent content—but not thematically radical content, because it wouldn’t know how to package that for its customers.

But Net­flix doesn’t only know what its audience likes to watch; it also knows how viewers like to watch it—beyond taste, the company understands habits. It doesn’t just know that we like to watch Breaking Bad; it knows that we like to watch four episodes of Breaking Bad in a row instead of going to sleep. It knows, in other words, that we like to binge.

Whatever our televisual drug of choice—Battle­star Galactica, The Wire, Homeland—we’ve all put off errands and bedtime to watch just one more, a thrilling, draining, dream-­influencing immersion experience that has become the standard way to consume certain TV programs. We’ve all had the hit of pleasure after an installment ends on some particularly insane cliff-hanger and we remember that we can watch the next episode right now. It’s a relatively recent addition to the pantheon of slightly illicit yet mostly harmless adult pleasures, residing next to eating ice cream for dinner, drinking a beer with lunch, and having sex with someone you probably shouldn’t.

And when you start making television to satisfy those kinds of habits, you just might end up making a very different kind of television. The new Golden Age of TV is already marked by shows that are meant to be consumed as series-long narratives rather than a collection of ­single episodes. Distinct themes and motifs weave through each season of Mad Men; someone dropping in on Breaking Bad without having followed Walter White’s transformation from mild-­mannered man to methalomaniac would miss the whole point; Lost depends on its audience having an encyclopedic grasp of all the “mythology” that has come before.

TV shows with the most international adaptations. Source: Everett (4); Getty Images (2)

  • Married … With Children
  • Number: 12
  • Best Title: Help, My Family Is Crazy (Germany)
  • The Nanny
  • Number: 8
  • Best Title: My Fair Nanny (Russia)
  • The Golden Girls
  • Number: 8
  • Best Title: Brighton Belles (UK)
  • Everybody Loves Raymond
  • Number: 5
  • Best Title: Everybody Loves Roman (Poland)
  • Desperate Housewives
  • Number: 4
  • Best Title: Desperate Women (Turkey)
  • Law & Order
  • Number: 3
  • Best Title: Paris Criminal Investigations (France)

Yet traditional television networks still apportion their series in weekly episodes over four to eight months, allowing binge-­watching only in retrospect, even though, for an increasing number of viewers, binge-­watching isn’t just a way to catch up on a season that has already wrapped but a better viewing experience altogether. Why let networks and advertisers get in the way of that? Which may explain what Sarandos says, that the audience for Breaking Bad is bigger on Net­flix than it is on AMC. (One of the few hard numbers Net­flix has shared is that 50,000 of its subscribers watched all 13 episodes of Breaking Bad’s season four the day before the new season premiered on AMC.)

The more that ­people binge-watch, the more attached they become to the show. “Binge-watching is a behavior that really started for us back in the DVD days. The way ­people were returning the discs, they weren’t watching one a night or one a week,” Sarandos says. “As we got into the streaming business, it became more trackable. What we saw was that the ­people who did this were much more attached to the shows. And because they were more attached to the shows, they reported more value in watching them on Net­flix.” In other words, the more you binge, the better for Netflix.

Or so Netflix is betting—others aren’t sure. When House of Cards premiered, Variety argued that its decision to post all the episodes at once was virtually begging new customers to sign up for a month of service, watch the entire series in a few days, and then quit—a behavior that might be even more common for Arrested Development, especially since Hastings has announced it’s likely to make only one season of the show. And by releasing all the episodes at once, Net­flix forgoes some of the attention, recaps, and interviews that standard shows enjoy—the sustained burst of publicity that convinces ­people a program is worth binge-­watching in the first place.

But though releasing all of the episodes of a series at once has its risks, it also encourages complexity. Back on the set of Arrested Development, actress Portia de Rossi, who plays Lindsay Bluth Fünke, says that at one point she had seven scripts splayed across her dressing room floor because it was the only way she could grasp all of the plot’s intricacies. “I did a scene with Jessica [Walter, who plays Lindsay’s mother], where she seemed to be saying the nastiest things, in my mind, because it was so sarcastic,” she says. “But in her episode, you realize that she was being sincere. If you see my episode first, you’re like, ‘That fucking bitch.’ But if you see hers first, I look completely heartless.”

The new Arrested Development is not just a seven-hour movie. It’s something new—a collection of episodes released altogether that can be remixed and recombined and that gain something from each juxtaposition. Right now that’s a framework only Net­flix can offer. Asked what the show would have been like had Showtime won its bid, Hurwitz says, “I know that ­storytelling-wise, saner ideas might have prevailed.”

The new Arrested Development may be insane, but it also makes sense commercially. Net­flix is simply pursuing its interests—and in doing so is upending the conventional business model, opening up new creative possibilities, and building a home for a radically different kind of TV. That’s how television has always moved forward. Some of the very first programs were created so networks would have something to air between soap commercials; HBO came up with ambitious series like The Sopranos because it wanted to attract more subscribers. Now Net­flix, on a quest to grow its audience, is using the Bluths to give us wilder TV than we’ve seen before. Not bad for a company created to rent DVDs and a sitcom that once struggled to find its audience.

Willa Paskin (whpaskin@gmail .com) is the TV critic at Salon.

SECRET WEAPON
  • Jay Chandrasekhar

    Director

  • Known for
    Directing episodes of your favorite sitcoms of the past 10 years, from Arrested Development to Community to Happy Endings
  • 5-second bio
    Age 45. Member of comedy troupe Broken Lizard (Super Troopers, The Babymakers).
  • Series directed 20
  • Films directed 5

SECRET WEAPON
  • Nick Grad

    Exec VP of Original Programming for FX

  • Known For
    Overseeing all series development for the network; helped develop Sons of Anarchy, Louie, Justified, Archer, The League, and others
  • 5-Second Bio
    Age 42. In previous roles at FX helped develop It’s Always Sunny in Philadelphia, Rescue Me, and Nip/Tuck.
  • Series developed 12
  • Emmys for shows he worked on
    40 nominations, 5 wins

Rule 10

Passion Trumps Popularity
Audience and ardor aren’t the same thing.

By most standard metrics, Vegas is a smash hit. Every week, the rough equivalent of the population of Zambia tunes in to the prime-time drama—making it one of the most watched series on television. But that doesn’t mean people actually like it. Nor does fan love necessarily translate into audience. The data cannot be denied. —Liz Stinson



Check out rules 1-8 here