Will Jay Leno rescue or ruin network TV?

LOS ANGELES Mon Sep 14, 2009 10:08am EDT

Host Jay Leno answers a reporter's question during a panel for his upcoming television series ''The Jay Leno Show'' at the Television Critics Association Cable summer press tour in Pasadena, August 5, 2009. REUTERS/Mario Anzuoni

Host Jay Leno answers a reporter's question during a panel for his upcoming television series ''The Jay Leno Show'' at the Television Critics Association Cable summer press tour in Pasadena, August 5, 2009.

Credit: Reuters/Mario Anzuoni

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LOS ANGELES (Reuters) - U.S. broadcast television is dying, says comedian and talk-show host Jay Leno, and he ought to know.

But whether the former late-night king's move to prime-time TV is the nail in the coffin of advertiser-funded NBC -- and, indeed, the entire U.S. network TV business model -- or its savior remains an open question heading into the premiere of "The Jay Leno Show on Monday.

For a man whose new variety show was dubbed "The Future of Television" in a Time magazine cover story last week, Leno appears relaxed.

"It is hilarious!" Leno said of the intense scrutiny before his show's premiere. "It shows you the trouble we are in. (The Time story) just shows us that television has to change.

"Television is dying. It is not doing well. We can all either support each other to promote each other's shows, or we can all go back in our little caves and pretend like we are the only thing on," Leno, 59, said last week.

Leno's move from his 17-year run as host of the popular late-night talk show "The Tonight Show" to the earlier 10 p.m. hour five nights a week stunned an industry that has lost 25 percent of its prime-time broadcast audience in the past three years to cable TV, DVDs, the Internet and other entertainment.

One media analyst told Reuters that with advertising dollars spread thin, there is speculation about whether all five networks -- General Electric Co's NBC, Walt Disney Co's ABC, CBS Corp, News Corp's Fox and the CBS-Warner Bros joint venture, the CW -- will be around in their current form in five to 10 years time.

One thing is certain, Leno's move will produce cost savings for NBC, which is lagging in 4th place among the networks and needs to curb expenses by steering away from costly scripted dramas traditionally aired at 10 p.m.

Leno remarked he could do three shows for the cost of shooting one dramatic helicopter crash in the opening episode of the upcoming new NBC medical series "Trauma."

RISKY BUSINESS

But in already tough economic times, advertisers asked for discounted rates for "The Jay Leno Show," media buyers said. So, while NBC's costs will be reduced, so will its revenues.

Leno's top-rated "Tonight Show" attracted about 5 million viewers a night, on average. While NBC has declined to give a target for "The Jay Leno Show," which will focus more on comedy, an audience of 5 million is tiny compared with a hit drama.

NBC's rivals have loaded their 10 p.m. slots with crowd-pleasers such as CBS's "CSI" crime franchise that attracts some 17 million viewers per show.

They have also noted that a topical comedy show will lack ancillary markets that dramas generally tap to boost revenues.

ABC entertainment president Steve McPherson told Reuters, "There's no back end (syndication revenue), no international (rights to sell show abroad), no spinoffs."

Still, they will be closely watching the Leno experiment because they, too, are facing higher production costs and declining ad sales.

"Anytime you try something different, everyone is kind of skeptical. (But) If it's successful, you're going to have 30 knockoffs in 60 days," said Rino Scanzoni, chief investment officer of media placement firm GroupM.

"I wouldn't be surprised if 'The Jay Leno Show' became one of the most profitable shows on the NBC schedule in prime time," Scanzoni added.

Whether the Leno show improves NBC's bottom line, Leno is on the money regarding the demise of a TV model that depends on ads reaching shrinking audiences who increasingly use digital video recorders to skip commercials, analysts say.

The fragmentation of TV to more than 100 cable channels has forced advertisers to sell to niche groups when they would prefer to reach large audiences in one fell swoop, said Brian Steinberg, TV editor for Advertising Age.

"They are forced to assemble a mass out of niche markets by going on Facebook, Twitter, cable and radio," he said.

Given the fragmentation, Steinberg said there was speculation about whether NBC might "wink out" and turn itself into a new form of a niche-focused broadcaster.

"There is talk going on about whether there will there be an NBC in its current form in five years time. Dollars are spread very thin and maybe they (advertisers) can't support as many networks," he said. "There is chatter. Will CW, NBC, ABC, FOX, CBS all be around five to 10 years from now?"

(Additional reporting by Gina Keating; Editing by Phil Stewart)

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