Next month, Chelsea Handler takes her first bow on Netflix (NASDAQ:NFLX) with a one-hour special based on her sold-out comedy tour, "Uganda Be Kidding Me." It's the first step in executing a long-term deal that includes four documentary-style comedy specials due next year and a regular talk show debuting in 2016.
"If I was going to continue working in this industry, I knew I had to do something outside the box to keep myself interested. I wanted to sit with the cool kids at lunch so I approached Netflix to make sure they were as cool as I thought they were, and when I confirmed my suspicions, like with any other future lover, I made my move," Handler said in a press release.
At first blush, this deal might not seem like much. Handler closed out seven seasons of Chelsea Lately last month with about 1 million viewers, a high not seen in two-and-a-half years, but also peanuts in the world of big-budget TV. Is Netflix crazy? Hardly. This deal isn't about adding a few hundred thousand new viewers. It's about adding a lot more than that over the next several years.
Reed Hastings doesn't get the joke ... yet
The deal couldn't come at a better time. For all the great comedy in its inventory -- multiple seasons of Louie and Parks & Recreation, for example -- Netflix has done a terrible job of developing buzzworthy original comedy programming. And before you start, no, the new season of Arrested Development doesn't count. Twenty-First Century Fox's early cancellation of the series allowed Netflix to profit years later. Finding and funding new programming is more difficult.
Meanwhile, Time Warner's (NYSE:TWX) HBO is building a comedy empire with a lineup that includes Emmy winner Veep, perennial nominee Girls, and popular newcomer Silicon Valley. Go back a few years and you could also add Larry David's Curb Your Enthusiasm. Mix in a regular diet of stand-up specials and you've one of the best comedy networks on cable television. Netflix's top entry in original comedy at this year's Emmys? Orange Is the New Black, which is better described as a prison drama.
More comedy is coming
Adding Handler should close the gap. True, we won't know precisely what she has planned for at least a year. That's fine. Neither the timing nor the format of her show matters. We already know the most important part: she'll be highlighting new comedians who deserve to do more, just like she did on Chelsea Lately. Think of it as a test lab for potential spinoffs.
Or don't, since comedy isn't clinical science. The point is that she tends to showcase talent that goes on to greater things. Consider Whitney Cummings. The comedian-turned-actress developed and starred in her own show, Whitney, and co-created the CBS hit comedy 2 Broke Girls, which enters its fourth season next month.
We can't say for sure that Handler will spotlight the next great comedy talent on her talk show, but I like the odds. After all, who's more likely to know where the best acts are performing? An executive sequestered in a Beverly Hills office complex, or a touring comedian that's paid to be funny? You know the answer.
This is applause-worthy deal that addresses a key weakness is Netflix's programming lineup. With enough time, it may prove to be the biggest bargain in the short history of Netflix Original Series. Do you agree? Disagree? Start the conversation below.
Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple, Google (A and C class), Netflix, and Time Warner at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.