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Netflix looks to hook subscribers with ‘Arrested’

  • This undated publicity photo released by Netflix shows David Cross, left, and Portia de Rossi in a scene from "Arrested Development," premiering May 26, 2013 on Netflix. The sitcom, also starring Jason Bateman and Will Arnett, was canceled by Fox in 2006 after three seasons. (AP Photo/Netflix, Sam Urdank)

    This undated publicity photo released by Netflix shows David Cross, left, and Portia de Rossi in a scene from "Arrested Development," premiering May 26, 2013 on Netflix. The sitcom, also starring Jason Bateman and Will Arnett, was canceled by Fox in 2006 after three seasons. (AP Photo/Netflix, Sam Urdank) Purchase photo reprints »

  • This undated publicity photo released by Netflix shows Will Arnett, left, and Jason Bateman in a scene from "Arrested Development," premiering May 26, 2013 on Netflix.  (AP Photo/Netflix, Michael Yarish)

    This undated publicity photo released by Netflix shows Will Arnett, left, and Jason Bateman in a scene from "Arrested Development," premiering May 26, 2013 on Netflix. (AP Photo/Netflix, Michael Yarish) Purchase photo reprints »

  • This undated publicity photo released by Netflix shows Will Arnett, left, and Jason Bateman in a scene from "Arrested Development," premiering May 26, 2013 on Netflix.  (AP Photo/Netflix, Michael Yarish)

    This undated publicity photo released by Netflix shows Will Arnett, left, and Jason Bateman in a scene from "Arrested Development," premiering May 26, 2013 on Netflix. (AP Photo/Netflix, Michael Yarish) Purchase photo reprints »

  • This undated publicity photo released by Netflix shows Will Arnett, left, and Jason Bateman in a scene from "Arrested Development," premiering May 26, 2013 on Netflix.  (AP Photo/Netflix, Michael Yarish)

    This undated publicity photo released by Netflix shows Will Arnett, left, and Jason Bateman in a scene from "Arrested Development," premiering May 26, 2013 on Netflix. (AP Photo/Netflix, Michael Yarish) Purchase photo reprints »

  • This undated publicity photo released by Netflix shows David Cross, left, and Portia de Rossi in a scene from "Arrested Development," premiering May 26, 2013 on Netflix. The sitcom, also starring Jason Bateman and Will Arnett, was canceled by Fox in 2006 after three seasons. (AP Photo/Netflix, Sam Urdank)

    This undated publicity photo released by Netflix shows David Cross, left, and Portia de Rossi in a scene from "Arrested Development," premiering May 26, 2013 on Netflix. The sitcom, also starring Jason Bateman and Will Arnett, was canceled by Fox in 2006 after three seasons. (AP Photo/Netflix, Sam Urdank) Purchase photo reprints »

  • This undated publicity photo released by Netflix shows David Cross, left, and Portia de Rossi in a scene from "Arrested Development," premiering May 26, 2013 on Netflix. The sitcom, also starring Jason Bateman and Will Arnett, was canceled by Fox in 2006 after three seasons. (AP Photo/Netflix, Sam Urdank)
  • This undated publicity photo released by Netflix shows Will Arnett, left, and Jason Bateman in a scene from "Arrested Development," premiering May 26, 2013 on Netflix.  (AP Photo/Netflix, Michael Yarish)
  • This undated publicity photo released by Netflix shows Will Arnett, left, and Jason Bateman in a scene from "Arrested Development," premiering May 26, 2013 on Netflix.  (AP Photo/Netflix, Michael Yarish)
  • This undated publicity photo released by Netflix shows Will Arnett, left, and Jason Bateman in a scene from "Arrested Development," premiering May 26, 2013 on Netflix.  (AP Photo/Netflix, Michael Yarish)
  • This undated publicity photo released by Netflix shows David Cross, left, and Portia de Rossi in a scene from "Arrested Development," premiering May 26, 2013 on Netflix. The sitcom, also starring Jason Bateman and Will Arnett, was canceled by Fox in 2006 after three seasons. (AP Photo/Netflix, Sam Urdank)

Netflix is hoping its recent 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 has returned, seven years after Fox cancelled the series. The revival coincides with Netflix’s own comeback from a customer backlash over price increases and shareholders’ worries about rising expenses.

Now, Netflix is winning back subscribers and investors with an 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, is the third series from Netflix Inc. 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 Corp. has — Netflix has already reshaped home entertainment.

The service is encouraging more people to forego cable and satellite TV service and rely on Netflix to watch TV series a year or more after they originally were shown. Netflix also is empowering viewers to watch an entire season of a series in days instead of months.

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.)

Fox canceled “Arrested Development” in 2006 over the protest of the series’ fervent fans. The show 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.

All 15 new episodes of “Arrested Development” are being 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.

Netflix’s departure from TV’s traditional one-episode-per-week strategy has been well received. 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.

“Arrested Development” is expected to attract even more new subscribers than “House of Cards” because of its built-in fan base. 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.

The return of “Arrested Development” prompted Netflix to be more optimistic about subscriber growth during the traditionally sluggish April-to-June period, Hastings told The Associated Press. The Los Gatos, Calif., company predicted that it could gain as many 880,000 U.S. Internet streaming subscribers during the second quarter.

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. 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. Then, Hastings unleashed even more outrage by outlining plans to spin off the DVD-by-mail option into a separate service called Qwikster. Netflix didn’t waver on its new pricing system, but Hastings scrapped the Qwikster concept amid the backlash. The DVD-by-mail service, which has lost 6 million customers in the past 18 months and now has 8 million, is being allowed to slowly fade away.

While Netflix subscribers were howling, shareholders were dumping their stock. Investors feared the company wouldn’t be able to attract enough subscribers to cover the steadily rising fees for licensing video rights.

Those worries have dissipated now that Netflix is growing rapidly again, something that Hastings had promised would eventually happen after apologizing for the Qwikster mistake and the way he handled the price increase.

After hitting a high of nearly $305 in July 2011 and then falling to below $53 last August, Netflix’s stock is trading around $225.

“I don’t have a sense of ‘I told you so,’ or something,” Hastings told the AP last month. “I have a sense of satisfaction that we are doing what we do best, which is steadily improving our service.”

PULL QUOTE:

‘Netflix CEO Reed Hastings isn’t done disrupting things yet.’

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