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November 21, 2011 by · 1 Comment 

Netflix, which has been sharply criticized by some analysts for taking on content deals that threaten to break its back financially, is taking on another one. This time it’s the revival of the long-ago-canceled comedy series Arrested Development. Netflix said over the weekend that it plans to make an unspecified number of new episodes available to subscribers of its streaming service beginning in 2013. A news release said that it was partnering with 20th Century Fox TV in the series’ revival, but terms of the deal were not disclosed. The Wall Street Journal‘s website said that Netflix has been “noodling” with the strategy of reviving canceled shows that have a continuing online following and extending the life of ones with avid niche audiences that are about to be canceled. It said that Netflix chief Reed Hastings now wants to create an online version of HBO, “stocked with stuff you can’t get anywhere else.” Netflix content chief Ted Sarandos said in a statement over the weekend: “Arrested Development is one of the finest American comedies in TV history and its return through Netflix is a perfect example of how we are working closely with studios and networks to provide consumers with entertainment they love,: The unanswered question is whether such a strategy will attract enough new subscribers to cover the costs of production and generate a profit for Netflix and Fox. Several analysts have estimated that Netflix’s content costs for its streaming service now exceed revenue by more than 2-1. Moreover, veteran media analyst Eric Wold of B. Riley & Co. has sent a note to clients saying that he believes Netflix’s recent missteps will result in the loss of 4.7 million subscribers, representing $445 million in annual rental revenue. He predicted that a substantial number of those subscribers will be switching to kiosk operator Redbox.