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Originally published Friday, May 24, 2013 at 5:10 PM

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‘Arrested Development’ revival latest sign of Netflix rebound

The return of the comedy show “Arrested Development” coincides with Netflix’s own strong comeback from a customer backlash over price increases and from shareholders’ worries about rising expenses and the company’s future.

The Associated Press

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SAN FRANCISCO — Netflix is hoping this weekend’s release of the resurrected TV series “Arrested Development” will draw more subscribers to its Internet video service.

The award-winning show about the dysfunctional Bluth family returns Sunday, seven years after Fox canceled the series.

The revival coincides with Netflix’s own resounding comeback from a customer backlash over price increases and shareholders’ worries about rising expenses. The adversity had raised doubts about the company’s management and future.

Now, Netflix is winning back subscribers and investors with a bold attempt to establish its $8-per-month service as a home-entertainment powerhouse that rivals the broadcast television networks and premium cable channels such as HBO.

“Arrested Development,” a comedy that won six Emmy Awards during a critically acclaimed three-year run, is the third exclusive series from Netflix this year. It’s part of Netflix’s effort to add more original programming to a selection that consists primarily of old TV series and movies.

With 29.2 million U.S. subscribers — far more than the 21.9 million TV subscribers that leading cable-provider Comcast has — Netflix has already reshaped home entertainment.

Netflix CEO Reed Hastings isn’t done disrupting things yet. He is spending more than $2 billion annually, including about $200 million to finance original programming that can be watched on traditional computers, smartphones, tablets, video-game consoles and Internet-connected TVs.

By expanding its library of content, Netflix is hoping people will decide to spend their idle time on its Internet video service rather than play video games, fraternize on Facebook, surf cable or satellite TV, or watch a DVD. (Netflix started out as a DVD-by-mail rental service, but it is phasing that out in favor of Internet streaming.)

“We want our members to choose Netflix in these moments of truth,” Hastings wrote in a recent essay outlining Netflix’s philosophy.

By bringing back “Arrested Development” this weekend, Netflix is also trying to prove people still want to see quality entertainment even when the weather is getting nicer and the days are growing longer. That runs counter to the philosophy of broadcast TV networks, which for decades have typically started the new seasons of their top TV series in September and stopped showing new episodes just before Memorial Day weekend.

BTIG Research analyst Rich Greenfield believes the scarcity of compelling choices on broadcast TV at this time of year is bound to help Netflix draw more viewers to “Arrested Development.” In a recent analysis posted on BTIG’s blog, Greenfield predicted the total number of hours watched on Netflix in June might even surpass the Fox broadcast network for the first time.

If that were to happen, it would be an ironic twist, given that Fox canceled “Arrested Development” in 2006 over the protest of the series’ fervent fans. “Arrested Development” had low ratings during its run, but the viewers who did watch loved it. Others discovered the show later on DVD or Internet streaming — both of which have been available through Netflix.

The first three seasons of “Arrested Development” were being watched by so many subscribers that Netflix knew another season would be well-received by its existing audience and would likely lure new subscribers, too.

Like Netflix’s previous series, all 15 new episodes of “Arrested Development” will be released simultaneously to allow viewers to watch the show as if they were perusing a book and deciding how many chapters to pore through in a single sitting. “Arrested Development” is scheduled to be available at 12:01 a.m. PDT Sunday, meaning Netflix subscribers could conceivably devour the entire season before grilling on Memorial Day afternoon.

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.

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 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.

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.

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