It’s Not TV. It’s Arrested Development.

There is no aspect of Arrested Development so perfect that creator Mitch Hurwitz does not think he can improve it, including the way Jason Bateman demonstrates his love to Michael Cera. Hurwitz is going over a red-penciled script, revised on the fly, for a scene in which Michael Bluth (Bateman) is on the verge of a confession to his son George-Michael (Cera). “I think what would be great here is a hug,” Hurwitz says, putting his hands on Cera’s shoulders, pulling him in and giving him a gentle peck on the cheek.

Then Hurwitz heads back to his director’s chair. “Let’s make some streaming media, people!” he declares. “Let’s make something for some people’s phones!”

It feels like I’ve been here before, and in a way, I have. In 2004, I watched Bateman and Cera shoot scenes for Arrested Development, on much the same sets, on the 20th Century Fox lot across town. The Fox network sitcom, about a wealthy, dysfunctional family in Newport Beach, Calif., was just starting its sophomore season and was riding high on prestige, if not ratings. It had just won five Emmys, including Best Comedy. It was ambitious, joke-dense and even prescient: years before Lehman Brothers collapsed, the Bluths made their fortune on specious real estate deals, after humble beginnings that included running a frozen-banana business. (A key refrain: “There’s always money in the banana stand!”) That second season, Fox and Hurwitz hoped, would be the year the show broke big.

It didn’t. The show ran one more, truncated third season and was canceled in 2006. Talks to move it to Showtime fell through. Periodically, there were noises of a reunion or a movie–the kind of magical thinking that fans of shows from Deadwood to Jericho know too well. (The five stages of cult-TV death are denial, anger, denial, denial and denial.) But come on. No TV network was ever going to make Arrested Development again.

And no TV network ever did. Instead, a new 15-episode season of Arrested Development will be released May 26 on Netflix, the onetime movies-by-mail service that’s bidding to become the HBO of on-demand streaming video.

And notwithstanding Hurwitz’s quip about phones, the shoot looks for all the world like a full-scale network-TV production. The entire lead cast has returned, albeit on a staggered schedule. (Cera was also hired on as a staff writer.) The producers brought back most of the guest stars who appeared over three seasons on Fox–Liza Minnelli, Ben Stiller, Henry Winkler and many more–and added a slew of new ones, including Isla Fisher, Conan O’Brien and Kristen Wiig. The full season, Hurwitz says, should run about 8½ commercial-free hours, longer than a full broadcast season. There’s even a stair car. (The production rented one to replace the Bluth family airport-service vehicle that was prominent in the Fox show.)

In a real way, it’s not just Arrested Development that’s being rebooted here; it’s the entire TV business. Netflix, which earlier this year premiered the Kevin Spacey political drama House of Cards (at a reported production cost of $100 million for two seasons), is betting big on a future in which original TV comes through the Internet, via computers, set-top boxes or sundry iThingies. When Arrested was canceled, it was a blip in network-TV history. But the revived version could be the biggest thing in whatever TV is about to become.

Arrested development premiered on the Fox network a million years ago, in 2003, when there was still pretty much one way to watch a TV show: on television, the night it aired. DVRs were still a relative rarity, the iTunes store had just launched, Hulu didn’t exist, and Netflix was a service that mailed you DVDs in red envelopes. In retrospect, Hurwitz says, the limitations on how viewers got their TV adversely affected Arrested Development, which he crammed with callbacks to previous episodes, sly references and “jokes that you could only get if you had the ability to pause and rewind.” In Episode 11 of Season 2, a renegade seal bit off the hand of Buster Bluth (Tony Hale); the “loose seal”–a play on Buster’s Oedipal issues with his domineering mom Lucille (Jessica Walter)–was mentioned in a background newscast during the season’s first episode.

The same layered comedy and blink-and-you’ll-miss-it dialogue that made Arrested Development a diamond of comedic compression probably doomed its ratings: it demanded that you lean in, and most people still watched sitcoms to veg out. But the show was custom-engineered for a newly developing culture of fandom organized around DVDs, downloads and–especially–online streaming. This new kind of TV fan would binge-watch seasons–even entire series–at a run, engaging intensely and picking up details that casual weekly viewers might not. The new viewers had become accustomed to a denser, mockumentary style of comedy thanks to later TV hits, like The Office and Modern Family, that Arrested Development had paved the way for. They responded to the sorts of things TV creators were taught to avoid: complexity, textures, challenge. They wanted more. Arrested Development reruns, packed as tight as the hold of a space shuttle with comedy, gave them that.

So even as Arrested’s cast moved on to other projects, they noticed a strange phenomenon: they were being approached on the street more often as the stars of a canceled TV show than they were when it was on the air. Says Walter: “There wasn’t a day when people wouldn’t ask, ‘My God, Arrested Development–are they going to make a movie?’ They’d quote my lines. They’d quote lines I didn’t even remember I had.”

Someone else noticed too. Netflix, which Reed Hastings co-founded in 1997 as an online video-rental company, was transitioning from DVD mailings to streaming video. (This shift included the 2011 p.r. disaster when Netflix proposed splitting into separate streaming and DVD companies.) As streaming became a bigger part of Netflix’s business, so did TV shows. Studios were more reluctant to license movies for streaming, and fans were more likely to watch TV series on Netflix when they didn’t have to rent DVDs. (According to the company, TV series made up 18% of its DVD rentals at most but about 70% of its streaming traffic.)

One advantage of streaming is the data. “We track viewing to the second,” says Netflix chief content officer Ted Sarandos. “We know who’s watching, how many episodes you’re watching, what devices you’re watching on, how long your viewing sessions are.” All that data, Sarandos says, was telling them that whereas most canceled cult shows maintain a small, diehard fan base, Arrested Development’s was getting bigger.

In 2011, Sarandos, in charge of developing original shows for Netflix, pitched Ron Howard, who narrates the show and produces it with Imagine Entertainment, on reviving the revival. Howard and Hurwitz had tried for years to make an Arrested Development movie. But as Hurwitz plotted out the film, he found that simply catching up with each character would take up most of the running time. One more season could do that, at length, and serve as a calling card to sell the movie to studios. (In a bit of wishful thinking, Howard and his Imagine partner Brian Grazer play themselves in the new season, as producers making a movie based on the Bluths.)

“Mitch felt that Arrested Development has always been a bit of an experiment at heart,” says Howard. “It was about taking chances. And there was something consistent with that in trying this Netflix model.” Making the show outside traditional TV would give Hurwitz more creative freedom than ever. He certainly had plenty of material by now–he had never really let the Bluths out of his mind. Co-star Will Arnett, who made two post-Arrested sitcoms with Hurwitz (the animated Sit Down, Shut Up and the short-lived Running Wilde), remembers, “There was this Arrested Development document on Mitch’s computer. We’d be talking about ideas for Running Wilde, and Mitch would say, ‘You know, that would be a great line for Michael [Bluth].’ And he’d open that document. It was always there.”

Like house of cards, the new season of Arrested Development will be released online all at once. This had a practical benefit for production. A network sitcom has to shoot episodes in order, to keep the pipeline of weekly installments flowing. “If you’re doing The Office, at any moment you can say, ‘O.K., now we’re doing John Krasinski’s scene,’ because you have him under contract,” says Hurwitz. “We didn’t have that opportunity.”

Last fall, for instance, Arnett (playboy-magician son G.O.B. Bluth) was making Up All Night for NBC. Hale (nervous mama’s boy Buster) was making HBO’s Veep. Jeffrey Tambor (who plays both criminal real estate patriarch George Bluth and his hippie brother Oscar) and Portia de Rossi (self-absorbed adopted daughter Lindsay Bluth-Fünke) had pilots pending at NBC. So Hurwitz (who co-directed every episode of the new season with Troy Miller) shot scenes like jigsaw pieces, depending on who was available. Hurwitz recalls, “Some days our call sheet would say Episode 406, 408, 409, 412 and 401.”

Bateman, whose straight-arrow, white-sheep-of-the-family Michael Bluth appears in every new episode, worked out a front-loaded schedule to shoot all his scenes before leaving in late October to direct his first movie. He says it’s a testament to the show that the cast members, who had moved on to bigger things, each wanted to return anyway. “We had all managed to carve out careers for ourselves,” he says, “so it wasn’t like, ‘Oh God, I hope it comes back so we can work again.’ Doing Mitch’s material and being together with all of them was the only real reason.” (As Howard puts it dryly, “Nobody’s making their greatest paycheck doing this round of Arrested Development.”) It’s Bateman’s last night of shooting, and as he walks back to the set from a dinner break, he sounds a little wistful. “If the movie doesn’t come together,” he says, “this may be the last night I ever play this character.”

Whether it’s the last or not–no one’s saying never but there are no plans for a follow-up–Season 4 will be very different from the previous three. Rather than jump between stories, each episode will focus on one character; most episodes will involve some but not all of the nine principals. That’s partly a function of scheduling, but it also made the new episodes “less about the story and more about their inner lives,” Hurwitz says. (For now we can only take his word for it; Netflix is not screening the episodes for critics to review.)

Above all, the Netflix experiment let Hurwitz ratchet up the show’s labyrinthine complexity. Traditional TV is linear: one thing happens one week, and a new thing happens the next. But just as these episodes’ release will be simultaneous, so will their stories, which bring each character from 2006 to the present. They’ll overlap and interconnect. A character shows up in one episode with a black eye. How did he get it? You’ll find out in another episode. A setup might appear in one episode and the punch line in another. This might be baffling if viewers had to wait a week between episodes, but here they can watch–or, Netflix hopes, rewatch–at their own pace, in any order.

If that sounds like a puzzle for viewers, actually making the damn thing was, for Hurwitz, like solving a Rubik’s Cube in his head. To keep the story straight, his writers’ room had a bulletin board with plot points on index cards, à la Claire Danes’ big wall of crazy in Homeland. Events were linked with different-colored yarn: “simultaneous string” (i.e., “this thing happens when this other thing does”) and “causal string” (“this thing happens because this thing did”).

A change in one episode meant changes in others. As Hurwitz says, “I filled in more of the crossword in ink.” Production had to be both meticulously planned and highly flexible. The initial 10-episode order somehow mushroomed to 15. As producer John Foy puts it, “Mitch’s genius is a blessing and a curse.”

It isn’t always a picnic for his actors, either, who often find themselves saying lines whose motivation will be revealed in a later, yet-unwritten script or waiting for dialogue to be rewritten on the spot. At one point during my visit, Hurwitz halts the shoot after a rehearsal, calls for a MacBook and retypes the entire scene, speaking the lines aloud with varying emphases, tightening, microtuning. (For the current scene, in which Michael is disparaging his family company’s houses, “Why would you buy one of these pieces of–the American Dream?” becomes “Why would you buy one of these pieces of sh–short-term investments?”)

Finally Hurwitz stops typing, nods and hands the open laptop to an assistant, who runs to the production office to print new copies. Apparently this happens a lot. “At a certain point,” says co-star David Cross, “I wouldn’t bother memorizing my lines.”

If Hurwitz has an ambitious goal here, so does Netflix: to teach all of us to watch TV the way my kids do. At 8 and 11 years old, they’ve never surfed channels a day in their lives. They have only a vague idea of what a network is. They’d no sooner watch a show by sitting down at a specific time than get dinner by hunting a mammoth. And when they find something they like, they want to watch all of it. Last summer, my youngest son watched the entire seven-season run of Malcolm in the Middle on Netflix.

Netflix’s business strategy assumes that children are the future. In a memo accompanying a recent (and quite robust) quarterly earnings report, Hastings predicted that “apps will replace channels, remote controls will disappear and screens will proliferate.” Already, “cord cutters” are dropping cable or satellite to watch TV through iPads or game consoles. The new Aereo service allows subscribers to get broadcast-TV signals over the Internet, threatening the networks’ retransmission fees from cable companies. (In response, Fox has threatened that it might consider ditching its local affiliates and become a cable network.) There’s speculation that consumer or legal pressure could eventually push some channels to offer individual online subscriptions separate from cable packages. When the Great Unbundling comes, Netflix wants to be one of your must-have conduits for fun.

Think of it like HBO, which also makes its money off subscriptions, not ads, and which was also once primarily in the old-movie business. Series like Sex and the City and The Sopranos gave HBO an identity and made pop-culture junkies feel it was necessary to them. Likewise, House of Cards and Arrested Development give Netflix a cachet that streaming The Karate Kid doesn’t. “People don’t stop me on the street to tell me how much they love [AMC’s] The Walking Dead on Netflix,” Sarandos says. “But all they want to talk to me about is House of Cards these days. There’s a kind of brand affinity if it’s your own content vs. a rerun.”

Exactly how well it’s working is tricky to measure. Netflix recently hit 29.17 million U.S. subscribers, surpassing HBO’s 28.7 million. But for all its precise data, the company won’t say how many people have watched House of Cards, beyond selective boasts (e.g., it was Netflix’s most watched show in February in every country). Sarandos says you can’t make an apples-to-apples comparison of ratings between a show that airs weekly for 13 weeks and a 13-episode season viewers might watch in a day, a weekend or over a year. But networks say Netflix is getting license to inflate its success. John Landgraf, president of cable’s FX, told a TV critics’ conference last summer, “To say that 20 million users sampled something tells me nothing. They may have watched 30 seconds of it.”

It’s a fair point, as online TV is giving those users more and more to sample. Hulu “aired” a co-production of the British political satire The Thick of It and now carries two former ABC soap operas. YouTube is reportedly launching a set of paid-subscription channels to go along with its free cat videos. In April, Amazon launched 14 new-series pilots for fans to sample and review: eight raw comedies, free of TV standards-and-practices censors, and a half-dozen kids’ shows.

This business shift could open up new creative possibilities for writers like Hurwitz, just as when HBO turned over the keys to the likes of David Chase. So many of the things we think of as inherent to TV–commercial breaks, standardized episode lengths, weekly schedules–are simply artifacts of the old delivery system. Online, they’re not necessary, and if you can deliver a TV season as a single eight- or 13-hour work, you can literally build a story differently. So Hurwitz is constructing a TV season like a set of linked Web pages, with interconnections and multiple entry points. With House of Cards, director David Fincher avoided the sort of episode-ending cliff hangers that network-TV series use to bring viewers back a week later. He knew fans could simply press PLAY on another episode. (Soon enough, those same fans might also be pressing BUY–a generation has learned to buy books and camping gear from Amazon, so why not TV?)

Amazon, Netflix and their rivals are betting on a future in which the network is, if not dead, less essential. Should you bet against them? Go ask your local bookstore or video-rental joint, if you can find one.

Netflix’s TV still looks like TV, though, especially when it’s being made. Late on an October night, the crew has decked out a parking lot as the midway of a Mexican-themed carnival for a scene that will appear in several episodes. There are rides and rows of tents strung with flags and colored lights. The stair car is parked nearby; Martin Mull–who guests as private investigator Gene Parmesan–is decked out in a sombrero and poncho. In the scene, an emotionally distraught Buster (Hale) staggers up to a juice stand advertising “Donkey Punch.” Sputters Hale: “I want to punch the donkey!”

The line reading is pure Buster; you’d think it was seven weeks since the show went off the air, not seven years. That’s the funny thing here–the new Arrested Development is a revolutionary media event, but it’s also an old-fashioned TV show. On Fox, the series had to bleep profanities (often to hilarious effect, as in an episode that alternated the feline and filthy usages of pussy). On Netflix, it could swear at will, but it’s still going to bleep. “I think it’s because I have young daughters,” Hurwitz tells me. “It’s also funnier. A lot of comedy is about letting the audience finish the thought in their brains.”

And even though Hurwitz built the new Arrested Development to be intertextual, self-referential and friendly to rewatching, he does have a suggestion. A plea, even. “Don’t feel compelled to watch it all at once,” he says. “It’s wonderful and flattering that anyone would want to–I don’t take any of that for granted. But comedy requires something of the human body. I hope people are laughing, but you can get tired of laughing. So really, it’s O.K. with us if you take your time. That’s the whole thing with Netflix. Do with it what you want. It’s yours now.”

So it is–for a $7.99 monthly subscription fee. Seven years ago, network TV couldn’t figure out a way to keep the Bluths in business. It would be a fitting, ironic legacy if the Bluths were to show the TV industry, once and for all, that there’s money in the banana stand.