If you didn’t notice the line for the Bluth Frozen Banana Stand on Columbus Circle in Manhattan last week, chances are you’ve at least seen some of the many news articles trumpeting the revival of "Arrested Development" on Netflix May 26, some 7 years after its last ep aired on Fox. The buzz is enormous, so it was refreshing to hear Netflix CFO David Wells take a low-key tone at JP Morgan‘s investment conference last Wed.
Still, he’s willing to prognosticate more than Netflix did for "House of Cards," saying it "might" have a positive impact on 2Q, which is historically lower YOY on subs based on seasonal patterns. "’Arrested Development’ is a wild card. It has some really funny stuff in it if you are a fan," he said. BTIG‘s Rich Greenfield and team surveyed some 427 consumers at the frozen banana stand marketing stunt in NYC this week and collected some interesting stats: 86% of those the team spoke with already had Netflix. Of the 59 non-subs, 63% in the banana poll said they would likely sign up for "Arrested Development." Of course, that figure might not be that surprising considering they are also waiting in a long line (sometimes hours) for a free frozen banana on a stick.
For $8/month, it seems believable fans of the canceled critic favorite might be willing to sign up for the service, though BTIG noted that some folks they spoke with thought the price point was still too high (preferred $4.99/month) and others still were rankled by the 2011 price increase disaster when Netflix tried to spin off the DVD business. Wells acknowledged Wed that recovery from the ’11 misstep will take about 3 years. "We still feel like there is more recovery to have… We’re still mindful that any sort of negative pricing things could set that fire off again," he said. Any sort of price increase would have to wait until there was some real time away from the July ’11 event. And it also relates to what Netflix’s competitors are doing, he said.
As for partnering with cable ops and telcos, he said Netflix is doing that with smaller ops through its Open Connect program, Netflix’s private CDN that saves it money on 3rd-party CDN fees. "To the extent cable companies view us as a competitor, the less willing to partner… We’re certainly open to partnerships."
Other tidbits from the investor conference: Don’t look for any sporting events to migrate to Netflix. Wells said there isn’t any interest in live events at this time. Similar story with advertising. After experimenting with it in the past, "we didn’t feel it was conducive to the brand we have today."
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