Netflix To Spend More On Original Programing After Arrested Development And House Of Cards Success

Netflix used to be in the movie rental business, quickly leading to Blockbuster's demise, but with the success of original programing like the just released Arrested Development season 4 and House of Cards, they're now spending more to create original content.

Deadline reports that Netflix is looking to up their original programming budget. 

The streaming video and rental site now only uses around 5% of it's operating revenue for original programming, most recently to acquire the rights to Arrested Development and then produce the 4th season of the show after it was dropped by Fox.

But Netflix Chief Content Officer Ted Sarandos told investors today at the Nomura U.S. Media & Telecom Summit, "that will grow to 10% to 12% to 15% over the next couple of years."

A large part of the decision hinged on the recent success of Arrested Development as the cult-classic television show only unveiled it's new season 4 storylines in a budle of 15 original episodes released last weekend. 

The New York Times might have dismissed the recent shows in critical reviews, but Sarandos said, "We were thirlled with the customer engagement and reviews."

There was a dip in Netflix stock on Tuesday after the bad Times review, but Sarandos mentioned the review and said "It got a bad review in the New York Times, but it's not a Broadway show and it's not going to close because it got a bad review."

Sarandos went on to describe the series as "the Zapuruder film of sitcoms. People watch it over and analyze it frame by frame....We made the show not for critics but for fans, and the fans loved the show," which makes the critical reaction perhaps a bigger deal than other shows on traditonal television outlets.  

Despite lobbying from Firefox fans to bring back the sci-fi adventure series that spawned the film Serenity, Sarandos said Arrested Development was different because "the audience actually grew dramatically from the time it went off the air," in part because many people discovered the series on Netflix.  

It remains to be seen what shows Netflix will bring back, or if they'll continue to produce new shows like the Kevin Spacey hit drama, House of Cards.