Is 'Arrested Development' a dud? In Netflix's new world, it's unclear. (+video)

The reviews for the revival of 'Arrested Development' have been mixed, and Netflix stock prices are down. But that doesn't tell the whole story of Netflix's new media experiment.

By , Staff writer

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    This publicity photo shows Will Arnett (l.) and Jason Bateman in a scene from 'Arrested Development,' which premiered Sunday on Netflix.
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At first blush, Netflix's latest foray into producing an original television series might not appear to be a raging success. On Sunday, it released 15 new episodes of "Arrested Development" – the sitcom last seen on Fox in 2003 that maintained a cult following to the end.

The New York Times, catching the tenor of many reviews, said Netflix had "killed" the series, and Netflix stock shares had their largest one-day drop in nearly six months Tuesday, closing at $214.19, down $14.55 in two days. 

But Netflix is on the leading edge of something new in television entertainment – something so new that media-watchers don't really even know how to measure success.

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Was the revived "Arrested Development" a bomb? Does it suggest the entire Netflix model of producing original programming is doomed? Media experts, frankly, don't know. But they point to the "Arrested Development" experiment as another example of how the media landscape is shifting, and how an industry that has obsessed with Nielsen ratings and ad buys for decades is now confronted with in an entirely new animal.

After all, "Arrested Development" had no ads. And Netflix subscribers could access the show for free. Ultimately, it would seem, the success of a show on an online service like Netflix would depend on how many subscribers the show draws and how long they stay. But that's hardly a gratifying metric for an industry built on measuring precisely who watched what and when.

With AOL and Amazon both poised to debut their own original shows – AOL has 15 scheduled for fall – the question is likely to become even more pressing.

“We’re really in the very early stages of this new business model, so critics and audiences alike should be cautioned not to make too much of these quick successes or failures,” says Robert Thompson, founder of the Bleier Center for Television and Popular Culture at Syracuse University in New York.

Netflix's first original show, “House of Cards,” was deemed a critical success. The Washington-based political thriller starring Kevin Spacey cost $100 million but put Netflix on the map as a destination for high-quality original content – much as HBO has done with "The Sopranos" and "Game of Thrones." Netflix has credited "House of Cards" with helping its service add about 3 million more subscribers worldwide this year than last in the first fiscal quarter.

Yet even with those numbers, it's not entirely clear how Netflix can effectively monetize "House of Cards."

“Without a real system in place to measure success (like viewers between 18-49) there is no real sense that we know what a particular number of downloads monetarily means,” says Alfred L. Martin Jr., co-managing editor of FlowTV.org, an online journal of television and media studies, in an e-mail.

“The real test will come when Netflix (and AOL) figure out how to monetize this programming," he says. "If Netflix doesn't get more subscribers (following a HBO-like model) as a result of what has to be an expensive show to produce, then that's where the real trouble will lie, because without commercials, there is no stream of income outside of a subscriber base.”

"Arrested Development" attracted buzz because of its built-in fan base, its pedigree as an Emmy-award winner, and its well-loved cast, which includes Jason Bateman, Michael Cera, and Portia de Rossi. And not everyone thought it was a dud. The San Francisco Chronicle’s David Wiegand said the new season of the show "proves that there is still hope for sitcom genius from the TV industry.”

Regardless of critical reaction, the Netflix model is here to stay, say some analysts. 

"The failure of one series does not negate the whole new way of presenting television,” says Paul Levinson, a professor of communication at Fordham University in New York and author of “New New Media,” in an e-mail. “The fact that 'House of Cards' succeeded shows that this approach can and will succeed again."

Indeed, the Netflix experiment is likely only the beginning as the media marketplace prepares to explode.

“Whatever audience 'Arrested Development' did or didn’t get, it was a result of competition that is going to expand exponentially,” says Len Shyles, a media theorist at Villanova University in Philadelphia. “Fiber-optic cable will begin to replace copper wiring, and that will give us the option of thousands of channels, making it harder than ever for a show to succeed. The marketplace will decide.”

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