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/

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5 Comments »

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  1. Don’t forget how upset the actor’s union was that NBC was cutting out 5 hours of primetime television, effectively 5 primetime dramas. Leno also led to the cancellation of NBC’s moderately-successful drama Southland because they thought it was too edgy for 9 p.m.

  2. […] we discussed the facts of the 2010 Late Night Wars here and […]

  3. […] towards an editorial voice about the entertainment industry.  Have you read my 2-part Leno/Conan piece?  If not, take a gander – it’s good stuff (if I do say so myself).  The site will be […]


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