Last month's announcement that NBC will put The Jay Leno Show on every weekday at 10pm beginning next fall prompted CBS head Les Moonves to publicly state that his business was doing just fine, thank you very much.
But comparing the estimated production costs for Leno vs. scripted shows given by Mediaweek:
CBS CEO Leslie Moonves reacted to the move by predicting that CSI: Miami (and presumably some of its other 10 p.m. shows) would beat Leno, “by a lot.” But even if Moonves turns out to be right, NBC could still succeed financially with the program because the cost of producing Leno is estimated at about $2 million a week, compared to $15 million or more to fill those same hours with sitcoms and dramas, which cost $2 million or $3 million or more per episode.
I'll go on record predicting that unless The Jay Leno Show is a complete failure (which I will define as less than a 2.2 rating for adults 18-49. For reference, the average 18-49 rating for The Tonight Show this season is a 1.3) that you'll see ABC and CBS trying the same thing within a year.
NBC's best 10pm weekday show last fall, Law & Order:SVU, averaged about a 3.7 rating for adults 18-49. There are other factors favoring scripted programming, including syndication potential, DVD sales, and repeatability. But if you're spending $15 million a week (for 22 weeks) to get a ~3.5 demo rating compared to spending $2-3 million a week for a 2.5 demo rating that's going to be a tough business move to pass up.
So what you’re saying is… Jay Leno is going to kill network TV!!!
As a viewer, I have to hope this flops horribly. I don’t think it will flop, because, as you pointed out, the bar is set so low that Fat Albert could jump over it. But I sure it hope it’s a disaster, because otherwise we could be looking at potentially 15 hours a week removed from the broadcast nets schedule. That’s 15 fewer series for us to choose from, and that’s ugly. There is barely anything worth watching right now. What do you think it will be like when we have 15 fewer shows from which a potential good one can emerge.
Ultimately, I think the end game here will be the next round of negotiations with the unions. In four years time the networks will be screaming for blood in those negoations. Their viewership will be so low by then that unless actors/writers/directors are willing to take an enormous cut in compensation, I predict a lockout/strike that will last a long, long time.
And you know what? I’ll be on the nets side for a change. People take a lot less money to star in a show on TBS or AMC then they do to appear on NBC or CBS. Yet the ratings for those different outlets are beginning to equalize. In four years, I predict they will be almost completely equal, and the the nets will have something tangible to complain about. How can you compete when you are paying more for talent than some cable net that gets the same ad rates you do PLUS a fee from the cable companies?
Stick around, folks. It’s going to get a whole lot worse before it gets better.
Schmokey, Robert and I were discussing something similar this morning. This article from Mediaweek states that the CPMs (cost per thousand impressions) for top cable networks are only 1/3 what they are for broadcast networks:
http://www.mediaweek.com/mw/content_display/news/cable-tv/e3i17e8d113d82a5300f38c16b894a1df39
We think that might be a simple error. Perhaps that ad *rates* are 1/3, but not CPMs. But regardless, any difference in the CPMs between broadcast and cable will have to, however slowly, equalize over time and that’s bad for broadcast.
So maybe it’s time for CW to broadcast series @ 10.00pm (CWtv could get more viewers than from 8 to 10pm).
xx
“the cost of producing Leno is estimated at about $2 million a week, compared to $15 million or more to fill those same hours with sitcoms and dramas”
That is totally, totally false because it ignores the fact that NBC has the right to 3 plays from each of those $3m per episode dramas. When you factor in repeat weeks the true cost of programming the 10pm hour with drama is more like $3-5m per week.
Also, there’s an aftermarket for any scripted shows NBCU owns. We can debate what the future value of that aftermarket might be, but we can say with confidence that the aftermarket for NBC’s Leno show is going to be zero or damn close.
I still think NBC will be another CW – 90% crappy programming…so far NBC only has the Superbowl and the Olympics…oh and LAW & ORDER…which i watch in syndication if at all…Leno will be on at 9PM CENTRAL TIME….let me repeat that 9pm…it WON’T work in this time slot…LENO is not funny @ 10:30 – HE WON’T BE AT 9PM either…
….Leno sounds like Beeker from Sesame Street…I can’t understand him…how does he keep getting work?
Mikey, I didn’t try and put something like this in the post because I’m not certain of the numbers, but would you say this is a reasonably accurate picture (based on those Mediaweek numbers):
Leno show: (assume it airs live 46 of 52 weeks, as I believe I read): 46 weeks x $2-3 million/week = $92- $138 million/year
Scripted Shows: $15m/week x 22 weeks = $330 million
Plus, the summer weeks for scripted shows slots have to be filled by something. Presumably something pretty cheap, but not a cost of zero.
Those two numbers ($92-138 million vs. $330 million) however guessy they may be are still very different.
Am I on the right track here, or am I going wrong somewhere?
The mediaweek line about cable CPMs being one-third of broadcast is no typo.
Three factors:
Cable is a lot more cluttered than broadcast
Cable audiences channel-surf at a higher rate during commercials
The audience for a “hit” cable show is nothing special. If you don’t buy The Closer, you can get the same size and type of audience from 100 other shows. The audience for a broadcast hit can’t be found anywhere else and commands a premium CPM.
No, I think you’re in the ballpark Bill.
I think it’s fair to say that the cost for scripted would be about three times the cost for Leno. We’re both just guessing, but I think that’s certainly much closer to the truth than saying it’s 5 to 7.5 times greater, as Mediaweek does.
3x is certainly a huge difference, but assuming a factor of three keeps it debatable whether this is a smart move. It’s certainly possible that scripted would do more than double the rating of Leno’s show, command a higher CPM, and deliver some kind of aftermarket revenue.
I’m guessing what Mikey takes issue with is the apples-to-pears comparison because of saying $15/m per week. If you take it across the whole year including the rebroadcasts it’s a number that is much lower than $15 million per week. The aggregate view ($330mm or whatever the number is) seems to be correct but you’re looking at ~3x as expensive instead of ~7x (if the estimates are reasonable).
how can people with jobs be faster at commenting than me!
BTW, Mikey, I always suspected there was a huge CPM premium for scale though I was never able to get anyone to admit it. But the way the conversation with Bill went was that if Law & Order: CI had 2 million 18-49 viewers on USA and Law & Order had 2 million on NBC, that I seriously doubted CI on USA only was commanding an ~$8 CPM to L&O’s ~$25.
There are over 14,000 airings of shows on basic cable each week (all day). Typically well under 100 have more than 3 million viewers. Among the top 100 shows, I am still doubtful there is a steep CPM discount versus broadcast. With the thousands of airings with less than a million viewers, I am not surprised there is a CPM discount, but if the CPMs are really only 1/3rd, I am surprised it’s so significantly discounted versus broadcast.
The problem with trying to factor in rebroadcasts is that while the network may have the right to three airings, they rarely, if ever, use that right. Even if the networks decided to air one show every week of the year, during summer and holidays as well, they would still only be able to air about 8 episodes all three times. But that’s not how it works anyway. They air them for about 35 weeks a year, and usually a few of those weeks are used for specials, or they get a late start or early finish. So we’ve got about a dozen episodes, maybe, that air twice, and then none of them are ever seen in primetime again.
Julia, on average you may well be right, at least in the original timeslot. NBC gets a lot of mileage out of the L&O franchise repeats and so does CBS with its procedurals. But these days that is impacted largely by Saturday airings. But I’m betting House episodes wind up getting aired at least one time beyond the original broadcast even — across the board there are a *lot* of shows that air more than a dozen episodes a second time, it sure doesn’t seem like many make it to a 3rd airing. It would be interesting to see the analysis of rebroadcast. It’s complicated further because some shows (like Heroes) don’t typically repeat at all on NBC — but NBC does air them on SciFi and G4.
I’m not sure where that counts in the rebroadcast counting. though Heroes is an NBCU show, so I’m not sure how it works there. I am sure though say, with Two and a Half Men (which is not a CBS produced show) that *every* episode airs at least twice. Similarly House airs on Fox but is produced by NBCU — I’m sure Fox runs every episode at least twice and may get close to 3 times.
Yes, I was going to make an exception for shows like House which FOX uses to fill any dead space. But this is why it gets tricky to try to factor it in.
Just for fun i womdered what ABC/CBS would do if they decided to have talk shows at 10pm
CBS:
MONDAY
8pm: BBT, HIMYM,
9pm: TAAHM, WW
TUESDAY
8PM: NCIS
9PM: CSI:MIAMI
WEDNESDAY
8PM: THE MENTALIST
9PM: CRIMINAL MINDS
THURSDAY
8PM: SURVIVOR
9PM: CSI
FRIDAY
8PM: GHOST WHISPERER
9PM: WITHOUT A TRACE
SUNDAY
8PM: COLD CASE
9PM: CSI:NY
all the shows stay the same really, only a few got rid of, maybe 3 CSI’s is to much at 9pm though!
ABC:
MONDAY
8PM: DANCING…
9:30PM: SAMANTHA WHO?
TUESDAY
8PM: COMEDIES
9PM: DANCING…
WEDNESDAY
8PM: UGLY BETTY
9PM: LOST
THURSDAY:
8PM: GREYS
9PM: PRIVATE PRACTICE
FRIDAY
8PM: EXTREME MAKEOVER
9PM: WIFE SWAP/SUPERNANNY
SAUNDAY:
8PM: BROTHERS & SISTERS
9PM: DESPERATE HOUSEWIVES
looks fine to me :p
What is needed here is what I once saw in an old SCTV skit from the 1980s. NETWORK WARS – Hit squad from NBC bursts onto the CSI sets and spray the place with bullets. Its the only real chance NBC has. Seriously. NBC – Nothing But Crap. CBS retaliates by contracting a hit on the set of HEROES using casts of CW’s Gossip Girl and 13 is Fear as suicide bombers.
I agree there is a lot of junk on NBC, but they do have some quality shows in The Office, 30 Rock, and Chuck.
When I think of crap I think of Dancing with the Stars and once you’ve seen one crime drama on CBS, haven’t you really seen them all? It amazes me that some people can watch nearly 70 episodes of CSI a year
How do you factor in the cost of lost revenue when less people are watching one of your hours and therefore less people watching the advertising for your other shows, which therefore leads to lower rates in those shows also?
Doesn’t seem like a great business model, to just show cheap crap that gets no ratings because it is cheap. Otherwise, every network would turn into PAX, right?
Rufus, no question that we’ve oversimplified. Partially because we don’t have all the data, partially because even with all the data, it would be *really* complicated.
You’re right that those lower rated 10pm hours will directly hit the revenue potential of the local news shows that follow them, and some of those local stations are directly owned by NBC. It’s also less promotional opportunities for the rest of their line up. There are a lot of second and third order effects from this move that can only be guessed at now.