J.B. Flint of the LA Times has a story focusing a lot on the numbers of late night that paint a troubling picture. The same troubling picture as broadcast in general: people are fleeing to cable and increasingly likely to watch what's on their DVRs instead of tuning in to late night offering from the networks.
Even over the last few years advertising rates have dropped 30 percent. An ad that would've cost you $50,000 on the tonight show a few years ago, will only cost you around $35,000 when Jay returns. Assuming that Jay recovers his 1.4ish adults 18-49 rating, that looks like a 1.4 in late night garners $35,000 per 30 second spot.
While the overall audience for late night viewing on the broadcast networks is down 20% from five years ago, it's down even further -- 36% with adults 18-49 over the same period.
Though much cheaper than scripted programming The Tonight Show is predicted to cost around $100 million a year to produce with Letterman's Late Show costing around $75 million annually. The LA Times story notes that when Jay Leno was hosting the Tonight Show it had annual profits of around $50 million. CBS' Late Show is also said to turn "a hefty profit."
While those numbers are in the realm of hefty profits compared to expenses, it sure seems like a drop in the bucket from NBC's or CBS' perspective, which makes me wonder if the whole obsession with late night is due in large part to legacy thinking (in terms of the media) and inertia at the networks.
And it really makes me wonder how much profit there is to be made from Family Guy reruns at 11:30p on Adult Swim!
It's hard for me to put a price on the cachet value on top of any profits of having those late night shows. But given how small the numbers seem to be, if there isn't some significant perceived value in having those shows beyond the profits they can generate I can't really see FOX being overly enthusiastic about it. Let's say Conan could produce $25-$30 million in profits on FOX...
It sounds nice, but the expense involved is actually much greater for FOX since it would initially have to heavily promote having late night, and there's the cost of upsetting the apple cart with the affiliates who aren't in any hurry to give that time back to the network -- the affiliates get to keep more of the advertising revenue with their local programming than they would on a network show.
So I do wonder how much of FOX's expressed interest in Conan is true interest rather than merely the giddy delight of Schadenfreude at NBC's woes playing out so publicly.
I recommend the LA Time article -- there are a lot of #s ranging from how much the people who book talent for late night shows make to how much it costs for the bands to cover songs.