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On Netflix, Streaming Entertainment Is New ‘Development’ for Traditional TV

May 24, 2013 at 12:00 AM EDT
There's money in the banana stand, but what about in streaming entertainment? Traditional TV shows are showing up on online-only venues, including "Arrested Development," which is getting a second wind on Netflix after being canceled in 2006. Gwen Ifill talks to show producer Brian Grazer and Eric Deggans of the Tampa Bay Times.
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JEFFREY BROWN: Next: A new season and a new phenomenon hit computer screens this Sunday.

Gwen Ifill looks at the latest evolution of the entertainment industry.

JASON BATEMAN, Actor: Oh, dear lord. Because I’m looking to make a new start.

Oh, mother of God!

GWEN IFILL: Viewed one way, it’s old-fashioned television, a situation comedy with familiar actors appearing on a screen. But those screens are increasingly found on laptops, cell phones and tablets, as shows like “Arrested Development” migrate to streaming video.

DAVID CROSS, Actor: This is the sign I have been waiting for.

GWEN IFILL: Cult favorite “Arrested Development,” which was a critical hit for three seasons on FOX, before being canceled in 2006, is the latest online-only offering for viewers who are increasingly choosing when and where to get their entertainment.

That includes canceled soap operas like “All My Children” and original programming like “House of Cards” …

KEVIN SPACEY, Actor: Welcome to Washington.

GWEN IFILL: … which may have single-handedly revived the video service Netflix.

The programs lend themselves to on-demand binge-watching. Netflix’s 33 million subscribers can dip in and out whenever they want. Nielsen even has a name for some of these viewers: “zero TV households,” up to five million now from two million in 2007.

KEVIN SPACEY: Power is a lot like real estate. It’s all about location, location, location.

GWEN IFILL: “House of Cards” alone helped Netflix, which had been struggling, add three million new subscribers in three months, which pales when compared to conventional broadcast audiences, but is on the rise.

Other projects are in the works. This fall, “Desperate Housewives” actress Eva Longoria is producing a 13-episode adult animated comedy on the online video site Hulu.

As our viewing habits are shifting, so is the entertainment industry.

For more on, that we’re joined by Brian Grazer, chairman of Imagine Entertainment, which produces film and television, including “Arrested Development,” and television and media critic Eric Deggans of The Tampa Bay Times.

Welcome to you both.

Brian Grazer, why did you decide to take this online, this cult favorite, as I think we called it?

BRIAN GRAZER, Chairman, Imagine Entertainment: Well, I mean, there were other choices, but it turned out that Ted Sarandos, who’s a huge fan of “Arrested Development,” and happens to also at the same time run Netflix, asked us if we would like to do our series for Netflix, which would enable us to release it all in one night, and then enable audiences, kids in particular, because that’s our big audience is 18 to 25, to binge-view it.

And it’s the kind of show that kids would watch four or five or six episodes either alone in their room or at a party, or it just becomes a social situation. And they would watch several of these episodes. And so it was just kind of the perfect situation for us.

GWEN IFILL: Maybe some adults will be watching at the same time.

BRIAN GRAZER: Well, adults will watch it as well. I don’t want to eliminate adults.

So …

GWEN IFILL: Eric Deggans, is there a business model for this now? We have seen this a couple different times with a couple of different program — programs.

ERIC DEGGANS, The Tampa Bay Times: Well, I think Netflix is creating the business model, which is what’s so fascinating for those of us who cover television.

They’re pioneering a way of delivering television and spending the amount of money that they’re putting forward to make this show, to make “House of Cards,” to make “Hemlock Grove.” These are big-ticket enterprises. They pull out all the stops with the production.

And it’s helped Netflix’s stock price, but we don’t yet know how all of this is going to play out. I don’t think even Netflix knows how this is going to play out.

GWEN IFILL: Brian Grazer, when you’re trying to produce something like this, does it change knowing that people are going to watch all at once if they want to? Does it change the kind of program you put together? Does it change production?

BRIAN GRAZER: It doesn’t really change production.

In fact, what it does, it changes production only in the most favorable way, because it enables us to make them all at once and have them experienced all at once. So what we did was, with the actors, because the actors on our TV series, “Arrested Development,” they all became movie stars. Jason Bateman and Michael Cera, they — they all became movie stars.

So it enabled us to sort of figure out a schedule where each one of these stars would be sort of the primary focus of an episode, even though everybody else, too, will be on the episode. So it empowered us to board the show and make — and once again enable the show to come back, because it might not have actually worked in terms of a production schedule for normal television — normal television.

GWEN IFILL: Eric, I’m curious.

I know I watch very little television live anymore, and probably you don’t either. But, of course, that’s your job. But is that normal?

Is that something which is spreading, or is that a very targeted audience we’re talking about?

ERIC DEGGANS: No, it’s definitely spreading.

And what we’re finding is that younger people, of course, are less likely to watch television in the more traditional ways. They’re more likely to use it online. They’re more likely to be cord-cutters, people who don’t use cable television, for example, and only get their television habit through online.

And that’s why it’s interesting to see what Netflix is doing, because they seem to be targeting the way we’re going to be watching a lot of our television in just a few years.

GWEN IFILL: So, let’s assume for a moment, Brian Grazer, that this is a cultural shift, that people are just changing the way they entertain themselves. Does it pay off creatively or financially for producers?

BRIAN GRAZER: Well, OK, two things.

One is, I do think — I mean, nobody can really prognosticate what viewing habits are or what they’re going to be. But it really does seem, because of DVR, that they’re a cycle ahead of everybody else in terms of how they’re going to allow viewers to see television shows, because it’s just, I think, going to be the perfect situation for them.

As far as financially, they ended up — they, Netflix, and Ted Sarandos, their company, paid us what anyone else would have paid us, whether it be Showtime or HBO or possibly the network, for these episodes. So, in that way, it was quite comparable.

And I think it just helps you build your show, get it to syndication, get it to other out — you know, to other income streams quicker than maybe, you know, the alternative direction.

GWEN IFILL: So, Eric, if you’re the consumer in this formula, and you are thinking, well, maybe I can watch everything on my iPad, why should I bother to pay for cable anymore? Is this a threat to cable companies or to broadcast?

ERIC DEGGANS: Well, one of the things that you can’t get is, you can’t get live news necessarily. That’s harder. And you can’t get live sports. You can’t watch the Super Bowl, necessarily.

There’s a lot of live sporting events, football especially, that you can’t necessarily see online. And so that’s where cable companies are drawing people in. That’s one reason why ESPN, for example, can charge so much per subscriber, a reported more than five dollars per subscriber for their service, because that’s something that you can’t necessarily get online yet.

But there’s a drive amongst consumers, I think, to have more control over their viewing, to watch shows when they want to watch them and how often they want to watch them. And that’s breaking down both the cable TV model and the broadcast model.

GWEN IFILL: And let me tell you guys both my problem with this, which is, of course, I watched “House of Cards” all online, and I couldn’t talk to anybody about it.

When you’re binge-watching, Brian, you don’t have a chance to say, did you see what happened last night? Is isn’t that a risk for the way we communicate as a people at the water cooler the next day?

BRIAN GRAZER: That’s very interesting.

No one actually presented that question to me. I don’t know. I think we generate — there’s other ways to — I mean, I think I understand exactly what you’re saying.

But I think excitement, curiosity and the explosive nature of how conversations work can still be applied, because you can say, I just saw five episodes of “Arrested Development.” You might not be doing it on the water cooler the next day. You’re going to be doing it on all your social media.

So I — actually, I hadn’t thought of your question or its answer, but I do think that it leads to other conversations that live within the demographic of the audience, and that is even more scalable because of the Internet.

GWEN IFILL: How about that, Eric?

ERIC DEGGANS: Well, Gwen — Gwen, I have got to say, you remind me of that “Portlandia” sketch where two couples are trying to have conversations about the TV shows they like, and everybody’s: Spoiler alert. Don’t talk. Don’t talk.

ERIC DEGGANS: We have already seen that people, they watch “Mad Men.” They DVR it and they watch it when they can. They DVR various shows. And you try to talk to your friends about it, and they haven’t watched it yet and they don’t want to talk it.

So, that is a little bit of a problem. But what I found with “House of Cards” especially, that was such a well-done series, that people tended to watch it in the big chunks. So you really could talk about it. Within a week or so, you could really talk about it, because a lot of fans of the show had already watched it.

There’s so much anticipation for “Arrested Development” that they’re not even letting us critics see very many advanced episodes. I just found out today I may get to watch one episode in advance. Normally, we have been able to see three of them before the show debuts. So they’re not even trusting us critics to not spoil things for people.

GWEN IFILL: Well, I’m going to let you — I’m going to let you take that up with Brian Grazer offline.

Eric Deggans of The Tampa Bay Times and Brian Grazer of Imagine Entertainment, thank you both so much.

ERIC DEGGANS: Thank you for having us.

JEFFREY BROWN: Well, you can test your own “Arrested Development” knowledge by taking our online quiz. And we have also posted one author’s take on how technology has cracked open the entertainment industry to just about anyone with a creative idea.