Microsoft said on Tuesday it will add 53 episodes of the quirky, ill-fated, Emmy Award-winning show Arrested Development to its MSN Video content roster, and showcase new wrinkles in the site’s in-video navigational capabilities.

The combined announcements demonstrate the dual-path arms race that now engages online video outlets. They must aggressively seek out content of all sorts, while working on improving the users’ online video experience, giving it more of the lean-back, TV-quality feel.

MSN has been in the middle of the content arms race, making a number of recent deals for unique fare including one with Control Room, a promoter of streamed live music concerts, and an interactive video series involving the Schaumburg Flyers minor league baseball team (see Microsoft to Stream Concerts and MSN's Field of Streams).

The first five episodes of Arrested Development are currently available at http://arresteddevelopment.msn.com. Starting next month MSN will air three new episodes of the show every three weeks, and all 53 episodes will be aired within the next 12 months.

Shares of Microsoft rose a nickel to $29.94 in recent trading.

Cult Appeal

Online may eventually prove to be the ideal venue for a show like Arrested Development. The show about a wealthy, dysfunctional family was well-received by reviewers. It earned six Emmys in its run, which was a little over two years, but never gained good mass-audience numbers.

Its cultish appeal will probably play well online where ratings pressures are not paramount, and advertisers are learning that targeting well-defined, smaller audiences could be as lucrative as scatter-shot marketing to large, less well-defined audiences.

“We’ve created a number of innovative new features to enhance the video experience for Arrested Development, and will lead the industry in improving the overall experience for watching long-form video content online,” Rob Bennett, general manager of Entertainment and Video Services for MSN, said in a statement.

Pardon the Interruption

The Arrested Development episodes mark the debut of MSN’s new video player, which allows for better in-video navigation. After a viewing interruption occurs, users will be automatically returned to the spot in the video they were watching when the interruption occurred.

Users will be able to jump back 15 seconds in the video at any time. They can also take advantage of a larger screen option and send links of their favorite moments in any episode to friends.

But content still seems to be the key as fans of online video seem to possess unlimited tolerance for choppy, less than stellar video quality. But as the video gets longer, perhaps that tolerance drops off fairly dramatically and the race becomes more technological than content-oriented.