Late Night Wars (the 21st Century Edition) – Part 2

01/13/2010 at 12:55 am | Posted in Net/Spec | 5 Comments

This is Part Two.  Make sure to read Part One first.

http://iamnoahjames.com/2010/01/13/late-night-wars-the-21st-century-edition/

Ok, so now we are back in present day.  Seven months after it started, NBC wants to change it to The Jay Leno Show at 11:35p, The Tonight Show with Conan O’Brien at 12:05a-1:05a, & Late Night with Jimmy Fallon 1:05a-2:05a.

So why are they cutting short their commitment to the experiment?  Did it get worse ratings than expected?

Short answer:  No.

Longer answer:  Not only did it usually perform as expected, but some nights it actually out-performed ABC to come in at #2 for the night.  And those programs weren’t even reruns!  The Jay Leno Show did exactly what it said it would do to make the $300 million profit selling ad space at the A18-49 demo’s 1.5 rate (on a local and national level).

However, the affiliates have been very unhappy.  They claim that their local news has in fact suffered SO much that some of the stations went from being the #1 11p news to #3.  That’s HUGE!  Not only are they going to have to significantly drop their buy rates for the upcoming quarters, but they will have to be giving those advertisers some makegoods for not hitting the rating they had bought the 30 second spot for.

And yes, since Jay left The Tonight Show, they are now losing in the ratings to Letterman; even Fallon (who was beating Craig when following after Jay) is falling behind the competition. 

However, it would be ridiculous to slam Conan for “killing” The Tonight Show.  It took Leno 18 months to get The Tonight Show from last to #1 in the time period – thanks to Don Ohlmeyer coming in to save the network and retooling Jay’s show.  Conan has had only 7 months.  I highly doubt ANYBODY thought Conan would hit the gate running.  It’s entirely a different world in the 11:35p time period. 

If anything, you could look at a trickle-down effect being partly to blame for The Tonight Show’s current ratings.  If The Jay Leno Show brings in only a 1.5 rating, brings in fewer eyes to the 11p local news, which may in turn lower the number of eyes at 11:35p (who would normally keep the TV on NBC after watching the news).

Also, four late night talk show-type programs on one network could dilute interest/viewership in the format.  NBC wasn’t trying to ADD viewers, just profits.  Let’s do the math.  

Before I start, let me say the number I’m using is WAY more than they get.  It’s just easier math this way:

Let’s pretend NBC’s late night was getting 6 million viewers spread evenly over the two shows (we aren’t counting Carson Daly).  They AREN’T even, but for numbers’ sake they are.  That’s 3 million viewers per night per show. 

NOW let’s do it using The Jay Leno Show’s talk show combined with the other two programs.  Each program would now get 2 million per show.  So in this example, The Tonight Show & Late Night are each down 33% on viewership.  Ouch!

NBC's Jeff Gaspin

Jeff Gaspin, NBC’s current head honcho (he’s under Zucker though, FYI) is stating that the reason for ditching Leno at 10p was strictly due to this hurting the local affiliates’ news, even more than they thought.  So to appease the affiliates, they were going to put new programs in at 10p M-F after the Olympics.

However, there’s a missing element.  Don’t misunderstand me.  This for sure has to do with the angry affiliates.  But probably the MAIN reason for not telling the affiliates to suck it up and wait it out – and instead trying to please them – has to do with a certain cable company. 

In case you didn’t know, Comcast is buying a 51% share of NBC.  Affiliates potentially have the power to kill this transaction.  So NBC wants to make them happy, so they’ll give a thumbs-up to the whole deal.

Gaspin of course is going to say that isn’t the reason.  He probably legally has to.  Either way, I wouldn’t rule that out for the sudden late night shake-up.

So there you have it.  Probably the most information you need in order to understand why these changes are happening. 

The hosts were then given this weekend to decide what they thought of the proposed new schedule; not exactly a lot of time to reflect. 

So how have the three talk show hosts responded?  As for as I know, Leno is more than ok with it (he didn’t want to leave 11:35p in the first place).  Fallon is so new – he’s just along for the ride. 

However, Conan today has issued a statement saying that he will not move The Tonight Show to 12:05a.  Either he’s on at 11:35p, or he’s not on NBC.  This evening both sides meant to talk.  NBC now has to decide what to do.

As I’m publishing this report, nothing has been decided.  Even though they gave the hosts all of three days to think it over, they said they will have THEIR answer by the February 12th (the last day of the current schedule).

Does anybody win in this equation?  Yes.  Hollywood cast and crew will now be creating shows to fill in those 10p spots.  However, don’t look for five new scripted shows right after the Olympics.  They’ve made it clear that until next fall season, there may be a few new dramas, some nights of Dateline and reality shows for sure.

Also, current shows with so-so ratings on NBC now have a greater chance of renewal; since it would be uncharacteristic of  NBC to clean house and start over (even though a relatively blank slate may be what is needed).  When they announced last season the Leno program, that gave programs 5 less slots to air.  So NBC had to evaluate how many shows would have to go to make room for Leno, where to put Law & Order: SVU (their popular 10p drama), and how many new pilots they could purchase.  Even though they did renew SouthLAnd for a 2nd season, they cancelled it months before it was to air.  Had NBC still been able to air it at 10p, it probably would have at least aired the episodes ordered; but they deemed it too gritty/dark for 9p, and sent it packing.  Chuck was also a show that was in serious danger of cancellation due to less real estate over at NBC.

NBC's Chuck on Mondays at 8/7 Central

So now that 10p M-F will be open, and there isn’t enough time for a full slate of NEW shows to be ready to go – and NBC would want shows with a fan-base to help retain viewers – some bubble shows could be safe for another season.

So who’s the bad guy in all of this? 

Is it Leno, who would be pushing Conan later into the night; or even replacing him if NBC decides to let Conan go?  No.  Leno didn’t want to leave in the first place.  He wasn’t ready to hang up his platform in 2004, and he isn’t ready for it now.

Is it Conan, who is standing his ground?  Of course not.  Leno had 18 months to get to #1; Conan has been hosting the show for 7 months.  In his eloquent press release, he explains that moving The Tonight Show is not only unfair to the legacy of the show, but also not fair to Fallon.  He’s doing what he thinks is right.

It’s important to note that there is no evidence of any hard feelings between Leno and Conan.  It seems like everyone is taking sides as to Leno v. Conan.  This is pointless as I think if anything, they are on the same side with this; which happens to be on the opposite side of NBC.

So is it the fault of the affiliates who (not officially, of course) hold the Comcast deal in their hands?  No.  Their news ratings are suffering – and probably their other programs – so they are making less money.  No one can fault them for wanting to NOT LOSE THEIR INCOME.

I wouldn’t even necessarily call NBC “bad guys” in this.  The whole debacle is a total case of their eyes being bigger than their stomach.  They don’t want to lose any of them, but yet I have a hard time believing that they actually thought every party involved would be cool with the new lineup.  It’s not like the Palestinians were super-pumped to be told to move over and make room for their new neighbors in the Gaza Strip (which is exactly happening in this case).  However, looking at things in NBC’s shoes (where they aren’t wanting to just let one of them go), this was probably the only option they could present. 

You have to believe that both Leno & Conan have a bad taste in their mouth trusting NBC.  In the long run, I wouldn’t be surprised if the person they decide to keep ends up leaving due to mistrust.

I’ll keep you updated with any new developments in this horrible, crazy situation.

Regardless, the only way NBC could have avoided this was to (YEARS ago) just pick which one to keep on the network.  It’s beyond wanting your cake and eating it too; it’s wanting your cake, but not wanting to share the delicious cake with anyone else.  You’ll end up eating it all yourself, and puking over all of the birthday party guests.  No one wins.

Late Night Wars (the 21st Century Edition)

01/13/2010 at 12:48 am | Posted in Net/Spec | 5 Comments

I wasn’t planning on starting this section of the website (Net/Spec) until the 2010-2011 TV schedule came out, due to the nature of this section.  However, with this week having some HUGE TV news, I decided to roll this segment out now.

Well, it looks like the Late Night Wars are back on and things are tense.  And no, I’m not referring to the shakeup with Leno & Letterman that happened about 18 years ago.

In case you’ve been living under a rock, you’ve probably heard about last week’s announcement by Jeff Zucker (head of NBCU) that they were getting rid of The Jay Leno Show at 10P Mondays-Fridays once the Winter Olympics started (last edition would be February 12th, I believe). 

What they are wanting to do once the winter games are over is: The Jay Leno Show on at 11:35p, The Tonight Show with Conan O’Brien at 12:05a-1:05a, & Late Night with Jimmy Fallon 1:05a-2:05a.  Where this would leave Last Call with Carson Daly was never mentioned.  But hey, if they pushed his show back any further he would pretty much be a lead-in for The Today Show!!

But what happened?  Why are they scrapping The Jay Leno Show?  Was it not meeting NBC’s expectations?

Take a trip with me, if you would, to 2004.  It was a magical time full of wonder and intrigue.  Oscar-caliber movies flooded theaters, such as 13 Going on 30, Soul Plane, & Agent Cody Banks 2.  Los Lonely Boys wanted to ask you “How far is heaven?” – and did so about every other sentence in their hit song.

2004 was also the year of contract negotiations for both Jay Leno & Conan O’Brien.  Jay Leno signed an extension to host into 2009.  Unfortunately for Jay, he signed that contract earlier in the year than Conan did.  Conan’s new contract promised him the host duty for The Tonight Show starting in 2009 once Jay’s term was up.  This was promised to him due to multiple offers from other networks trying to woo Conan, which he was seriously considering.  NBC, and namely Jeff Zucker, did not want to lose what they (he) saw as the future of their NBC late night empire.  Leno was bringing a lot of success to The Tonight Show, but how long could that last, right?  …Right?

Well, 2009 came around and….Leno still had quite a healthy lead in the demos against Letterman.  Even before that, Jay had stated that he was not ready to hang it up and call it a day.  Well, since Conan was going to be hosting The Tonight Show no matter what in 2009, Jay needed to look at other options (read: other networks).  With his sizable lead over Letterman, he did have some hefty offers waiting.

Jeff Zucker, head of NBCU

You need to understand Jeff Zucker.  He is a guy who HATES to lose.  Nevermind the fact that since Friends and Frasier signed off, NBC had become the 4th place network for quite some time.  Then he had an epiphany (or at least he presented it at one).  He all but admitted that he had given up on NBC being able to compete with the other networks.  So instead of retooling the network (like CBS did to great success), he was going to help it be the #1 network…in profit margins.

Keep that in mind, as we go back to Jay Leno.  Where we last left him, he was about to lose his Tonight Show gig, he wasn’t ready to retire, and due to his lead in the coveted demos, offers were ready for him. However, to try and save face, Zucker came up with an idea that was sure to kill two birds with one stone:  Give Jay a show in primetime.  Not only would this keep Leno from going to another network, but this would save NBC buckets of money.

Thus, The Jay Leno Show (Monday-Friday 10p-11p) was born.  How does it help NBC?  Well, here was the thinking: 

Profit margin-wise, this was seen as smart for NBC and their shareholders.  It was also a safe bet… in theory.  They didn’t HAVE to be #1 in their timeslot for the show to be profitable.  Hell, they didn’t even have to be in SECOND place!  As long as they hit a national average of 1.5 in the 18-49 demo (meaning people ages 18-49, for those of you who don’t speak Nielsen), they were going to be making a profit of $300 million a year for the network in ad revenue.  Let me reiterate:  Not gross, but PROFIT.  That means after all expenses and paying Leno, they have $300 million LEFT to fill to gleefully swim around in (a la Scrooge McDuck).

That definitely beat the profit margin for the network on new and existing dramas/programs.  For one, developing shows is not only expensive, but they fail like 85% of the time.  Plus, the longer they are on the air IF they do perform well – or just well enough – shows can charge the network more (there is usually a huge bump by the 3rd/4th season). 

And who cares about DVD sales most of the time?  Yes, Leno was never going to release season sets; and yes, shows can make some nice $$$$ on DVD sales.  However, unless the network owns the studio that produces the show (and they don’t, most of the time), they don’t see one dime of it.  For example, FOX doesn’t see a cent of House’s DVD sales, since the show is produced by NBC Universal; they can only hope those watching House for the first time on DVD will then tune into the show on its regular night and time.

They also thought they would have a nice ratings boost when the competition were airing reruns since they would be offering more new installments, including the summer months; thus snagging viewers who would rather watch something new than re-watch an episode of a favorite show that they’ve already seen.  I think the verbiage used was that NBC was offering “fresh” programming that was up to date with the latest things going on, and so on.  Basically they were using a lot of exciting phrases to try and make it feel like a fun, water cooler show.

Speaking of the water cooler vibe, they were touting it as a virtually DVR-proof show.  You see, advertisers HATE the fact that you can skip through commercials.  Let me rephrase that.  Advertisers hate that you can skip through THEIR commercials.  Their thinking is why should I pay to run ads in a show when people aren’t going to see my spot?  Would you pay for a billboard on a highway that’s ten feet behind another billboard?  Technically people COULD see it; but if you’re driving 55 mph, you wouldn’t notice it.  So how is that beneficial to the billboard advertiser?

Make no mistake, the DVR – viewership increases do not help a show’s survival.  If the number of viewers increases 50% after the DVR viewers are added, good for the show.  However, advertisers pay the bills.  They pay attention to the overnight/next day Nielsen numbers, which do not factor in the DVR (aka advertisement-skipping) viewership.  So if Leno’s new show is in fact DVR proof, then it might be appealing to advertisers.

From the beginning, the local NBC stations (or affiliates) were not happy at all with this.  Even if the new show got a 1.5 average rating, they were worried that a weak lead-in would hurt their 11p local news ratings.  Remember, the lower the ratings, the less money they can command from advertisers.  And it could become a slippery-slope for their other news programs.  If they aren’t going to bed with their late news team, they may not wake up to their morning news team.  So NBC was potentially killing an affiliate’s main money maker.

But NBC & Zucker thought it was worth it.  Let’s shoot for those margins!!  With that, they committed to two years of the Leno experiment…

So what in the frick happened for them to bail on it 7(ish) months in???

Check out Part Two, which brings us to the present day.

http://iamnoahjames.com/2010/01/13/late-night-wars-the-21st-century-edition-part-2/

Net/Spec

01/13/2010 at 12:41 am | Posted in Net/Spec | Leave a comment

Short for: Network Speculation.  This section will cover the TV network news, with analysis.

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