Netflix, Inc. (NFLX): Was “Arrested Development” Worth the Investment?

That’s an important distinction, like the shift from partnerships to full project ownership that made Marvel a powerhouse, and worthy of The Walt Disney Company (NYSE:DIS) ‘s attention. The House of Mouse is now reaping the benefits of Marvel’s big content bet, as the entire profit streams from megahits like The Avengers and Iron Man 3 now flow into Disney’s coffers rather than being shared with distribution partners. Marvel proved that the model works; Netflix is dipping its toes into the production waters to see if the all-in model is right for its online distribution model. This could be yet another game-changer for the red-envelope-slinger.

Sniper vs. shotgun-slinger

Compare and contrast Netflix’s big-budget bets with the shotgun approach at Amazon.com, Inc. (NASDAQ:AMZN). The e-tailer giant wants to get into the original content game as well, but it doesn’t have the viewer data and the industry contacts that Netflix is basing its choices on, so Amazon launched a plethora of series pilots instead. Only the winners from that batch will see entire seasons produced. Remember that Netflix produces and publishes everything at once, skipping the whole pilot-production game.

Sometimes you get exactly what you pay for. Netflix is arming itself with a plethora of high-quality shows, while Amazon already gave up on some seemingly surefire hit concepts whose pilots didn’t get the budgets and attention they deserved.

Did Netflix miss the mark with Arrested Development? Only time will tell. I haven’t seen the new content yet, and was never a Bluth fan to begin with, so I’m not exactly the target audience here. Let the binge viewers get their fill, followed by a lemming trail of less fanatical fans. It’s the much larger second group that matters, and what they tell their friends about this new Netflix thing.

The article Was “Arrested Development” Worth the Investment? originally appeared on Fool.com and is written by Anders Bylund.

Fool contributor Anders Bylund owns shares of Netflix, but he holds no other position in any company mentioned. Check out Anders’ bio and holdings or follow him on Twitter and Google+. The Motley Fool owns shares of Walt Disney, Amazon.com, and Netflix. Motley Fool newsletter services have recommended buying shares of Amazon.com, Walt Disney, and Netflix.

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