Late night television is dying — plain and simple. The stark truth of that fact is highlighted by Jay Leno’s upcoming departure from “The Tonight Show.” After nearly 22 years on the job, the 62-year-old Leno will next year be replaced by 38-year-old Jimmy Fallon, who currently hosts “Late Night” at 12:35 a.m., directly following “The Tonight Show” on NBC. With viewership down 25 percent over the last 5 years, according to Nielsen, NBC is hoping to resuscitate “The Tonight Show” with a tact that has already backfired once before, leading many to question whether there’s really any saving the format, or whether it’s doomed to become a relic of the past.
In 2010, when NBC tried to move Jay Leno to a 10 p.m. time slot while bumping up Conan O’Brien from “Late Night” to “The Tonight Show,” the network quickly realized its mistake, as Leno’s new program bombed and viewership of “The Tonight Show” declined. Conan and NBC parted ways, and Leno was put back in charge of “The Tonight Show,” but audiences have continued to retreat. The show now averages 3.5 million viewers a night, and only about 1 million in the 18-to-49-year-old category that advertisers target.
NBC, owned by cable operator Comcast Corp. (NASDAQ:CMCSA), hopes that Fallon will help boost ratings among younger audiences, which are considered more valuable to advertisers. But the problem with younger viewers is that they’re increasingly going online for their content, and advertisers don’t consider online viewership as valuable. NBC is banking on that changing, and soon, but it’s a risk.
Fallon already has a stronger online following than Leno — his YouTube channel has roughly 250,000 subscribers, whereas Leno’s has only 20,000. Fallon’s brand of comedy, which includes online musical clips like the “History of Rap” duets with Justin Timberlake, is more popular with the younger, Internet-connected demographic than are Leno’s clips, which mostly consist of interviews.
Of course, Fallon’s success online won’t necessarily translate to television. Conan O’Brien, who now hosts “Conan” on Time Warner’s (NYSE:TWX) cable network TBS, has over 500,000 subscribers on YouTube, but that hasn’t prevented broadcast audiences, and subsequently advertising dollars, from shrinking as videos on YouTube continue to get millions of hits.
Success on the Internet is crucial for TV, but that doesn’t mean it can stem the losses all major operators are now experiencing. Broadcast matters less and less, but online doesn’t yet matter enough to counter that weakness — it won’t until advertisers decide that it should, and start spending their ad dollars accordingly.
Fallon is simply the safer choice, for now, because he has a strong presence in a nascent market, not just in a dying one. If the economics of television ever change to accommodate new viewing habits, NBC will be better placed to reap the rewards with Fallon than with Leno. But for now, the company is risking greater losses, as Leno is currently the top-rated late-night host among all the networks. While Fallon is No. 1 for his 12:35 a.m. time slot, that won’t necessarily translate to strong broadcast numbers in the more competitive 11:35 p.m. slot.
Disney’s (NYSE:DIS) ABC recently moved Jimmy Kimmel to 11:35 p.m., and he has 1.5 million YouTube subscribers, more than any other late show host. He’s also increased his TV audience since moving from 12 a.m. to the new time slot, according to Nielsen data. While Fallon’s audience will likely increase with the move, that of “The Tonight Show” might not, especially with a new competitor in Kimmel, whose YouTube presence also happens to dwarf Fallon’s.
In the end, networks are only hedging their bets, trying to stay in the game until the rules change in a way that will hopefully allow them to reap the profits they did in their heyday, before the Internet became an opponent. There’s no question that Americans are consuming more content than ever — viewership isn’t dying, it’s only traditional platforms that are dying, and that’s a problem across the board. This season alone, the four major broadcast networks — CBS (NYSE:CBS), Fox (NASDAQ:NWSA), ABC, and NBC — have lost 7 percent of their combined audiences, and almost 11 percent in the 18-to-49 group, according to Nielsen data. While they all continue to compete with each other for a smaller pool of traditional television viewers, they’re facing a decidedly bigger challenge: an entirely new frontier, in which the old rules just don’t apply.
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