Fox’s discarded comedy sitcom Arrested Development will reappear on Netflix (NFLX - Analyst Report) from May 26. Netflix recently announced that all 15 new episodes of the Emmy winning show will be streamed at once for its subscribers based in the US, Canada, the UK, Ireland, Latin America, Brazil and the Nordics.
Besides winning six Emmy Awards and a Golden Globe, Arrested Development was also included in the Time Magazine’s ‘’100 Best TV Shows of ALL-TIME” when it was aired from 2003 to 2006. However, its viewership declined with every passing season and higher production costs compelled Fox to discontinue the show in late 2006.
In Nov 2011, Netflix signed a partnership deal with Twentieth Century Fox Television and Imagine Television to revive the sitcom's production. We believe that the revival of the series after 7 years and that too on a first-run basis will boost Netflix’s subscriber base in the near term.
Lately, Netflix has made a name for itself by offering new and exclusive content to its subscribers compared to its closest peers such as HBO, Amazon.com Inc. (AMZN - Analyst Report), Hulu and Comcast Corp. (CMCSA - Analyst Report).
In February, Netflix started streaming its first original show House of Cards. Netflix has also another couple of original series in its content pipeline for 2013, namely Orange Is the New Black and a Gaumont International Television production, Hemlock Grove.
Through its original television shows Netflix has been venturing into different genres like comedy, political thrillers, autobiographies and horror. Netflix’s partnership with DreamWorks Animation SKG (DWA - Analyst Report) will help it to reach out to kids.
Moreover, Netflix recently commissioned a sci-fi show called Sense 8, which will bring together the Wachowskis (creators of The Matrix trilogy) and J. Michael Straczynski (the creator of television series Babylon5) for the first time.
Although escalating costs related to international ventures and licensing fees remain headwinds, we believe that improving paid subscriber base is a major positive for the company in the near term.
Currently, Netflix has a Zacks Rank #1 (Strong Buy).