There's Always Money in the Banana Stand, Netflix

Arrested Development's Michael Bluth finds that he can't leave his dysfunctional family, no matter how hard he tries.

Netflix (Nasdaq: NFLX  ) is hoping that couch potatoes will feel the same way. The video-streaming website revealed that it will be the exclusive home of Arrested Development when new episodes air come 2013.

Despite its recent quirkiness -- or is that Qwirkiness? -- and incidents causing head-shaking embarrassment, the dysfunctional video-streaming site knows that it can outspend anyone else to score content that will keep TV buffs close. It also knows what folks are watching. As the folks behind the critically acclaimed Arrested Development began teasing fans with the possibility of an actual movie and even additional episodes, a ravaged Netflix knew exactly what to do.

Arrested Development wasn't a ratings winner during its three seasons on News Corp.'s (Nasdaq: NWSA  ) Fox, but its rabid fan base and critical praise helped reignite Jason Bateman's acting career and served as the launching pad for Michael Cera and Will Arnett.

Netflix securing its position as the only place to watch first-run episodes of a fourth season -- seven years after the show's 2006 cancellation -- is huge. At a time when Netflix sorely needs an "aha moment" to convince both investors and audiences that it's still relevant, here come the Bluths to save the day.

Netflix has inked exclusive deals in the past. It recently struck a streaming licensing arrangement in which it will be the only online destination for complete prior seasons of The CW's scripted shows. It outbid major networks for David Fincher's House of Cards before that. However, now Netflix gets to bask in the street-cred glory that comes from helping rescue a cult classic from the major-network chopping block.

Leave Netflix now -- traitor -- and you're nixing the only online streaming service that has bankrolled a show's resurrection. Do you think that Amazon's (Nasdaq: AMZN  ) Prime instant viewing or Dish Network's (Nasdaq: DISH  ) Blockbuster Movie Pass could ever pull this off? Hulu Plus might, but who would trust a site owned by the same networks that serve as henchmen to critically acclaimed classics?

Netflix thought it was cooler than it really was when it aggressively hiked prices on dual plans and tried to force Qwikster on us. However, now it's showing that CEO Reed Hastings and gang are better than the company that investors have left for dead.

One of the more memorable Arrested Development moments came when Michael's imprisoned father tells him that there's money in the banana stand, a frozen banana kiosk the once-wealthy Bluth family runs as a side business. Michael dismisses the advice, feeling that his father doesn't understand the gravity of the family's dire financial situation. When the banana stand eventually burns down, Michael's father explains that he had stashed away money in the now-destroyed kiosk.

Netflix seems a lot like that blazing banana stand these days, but it appears to be putting out the fire before its money goes up in flames.

Maybe I'm just seeing this through shareholder goggles or as a big fan of the original show, but this is Netflix's smartest move in a long time.

If you want to follow this saga, track the latest news by adding Netflix to My Watchlist.

Motley Fool newsletter services have recommended buying shares of Amazon.com and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Longtime Fool contributor Rick Munarriz has been a Netflix subscriber and shareholder since 2002. He does not own shares in any of the other stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


Read/Post Comments (4) | Recommend This Article (5)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 21, 2011, at 9:50 AM, dbjella wrote:

    +1 for any reference to Arrested Development....best TV show.

  • Report this Comment On November 21, 2011, at 9:59 AM, TMFNewCow wrote:

    Sign me up

    -- Evan

  • Report this Comment On November 21, 2011, at 10:55 AM, Veritas01 wrote:

    One show, no matter how popular, is going to save Netflix. Its streaming content, particularly for movies, is horrible. HuluPlus has them beat in many cases on the TV side. The price increase and bungled non-apology still resonates with their customer base. Just read the response to any post they put on Facebook. There are a lot of angry people out there and further flight from the service is likely as other alternatives come online.

  • Report this Comment On November 21, 2011, at 8:39 PM, chadscards1274 wrote:

    Always hear the last comment about Netflix's streaming service selection. While Hulu is clearly better for TV, the NFLX streaming catalog is decent. Try to compare NFLX streaming catalog versus say AMZN Prime. AMZN Prime selection is truly terrible, Hulu is great for TV, but even worse for movies then anyone. Anyone who says NFLX streaming catalog is horrible clearly hasn't been on the site in a while.

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