9-23-25 - 8am - TV Watching Trends & Late Night TV

Episode Transcript

Speaker 1 (00:00):
Yeah, Michael, I got a question for that Nebraska guy.
It's been bugging me. I've heard some stories. If a
couple gets divorced in Nebraska, are they still brother and sister?
Curious minds want to know.

Speaker 2 (00:17):
I don't leave them. I just play them. And that
joke is older than I am, and it's usually about
people in Arkansas as cousins, not brothers and sisters. So
I'd just like to rip it apart. We're such jerks

(00:39):
late night comedy. So the big news, of course is
Jimmy Kimmel's back, don't know for how long, and Dragon
will be up tonight and just see it waiting to walk.
Got a chance, well, unless the cat vomits. Yeah. There

(01:01):
was a time I think when late night comedy on
broadcast television I'm not talking about cable TV, I'm talking
about broadcast television probably made some economic sense. I don't
think it makes any economic sense today at all. There
was an old justification that I think had some legitimacy
to it, that a network could take a thin margin

(01:25):
at eleven thirty Eastern because viewers would do what what's
really important about this is this is something that bug
don't get me wrong. I love Morning Drive, and I
would prefer them to do Morning Drive. But what's the

(01:47):
advantage of all the programs that follow me? Inertia? So
by the time you get to capitalists, particularly if you're
a P one, you more likely than not have switched channels.
So the networks could take a thin margin at eleven
thirty at night because viewers would wake up and turn

(02:12):
on the television and it would be the same channel.
You don't change channels before you turn the TV off,
at least most people don't. Well, that made sense one time,
but that's now been undermined by behavior, and that behavior
is changed because of the change in technology. The hard

(02:36):
numbers show collapsing audiences. Ad revenue is half of what
it was budgets that were built for back even during
Letterman's days or Leno's days, but not for today. Salaries, production,
all the overhead just continued on a almost on a

(02:59):
vertical line upwards, while the value of a light light
of a late night rating point continued to go downward.
Costs rise, revenues decrease. That's caused. That causes what well,
you could it's a loss.

Speaker 3 (03:18):
The staff is probably a whole bunch bigger as well.
Look at this Kimmel we discussed last week. Yeah, wasn't
it like twenty on that show?

Speaker 2 (03:27):
Right, isn't it cut? I don't know. I know nothing
about producing a comedy show, even though some people think
this show's a joke. We know nothing about producing a
comedy show. But I'm always kind of fascinated by that
number because you need twenty one riders to come up
with a what or a five minute monologue.

Speaker 3 (03:49):
Well, they couldn't do it with Biden. Well, true, there
was no material there whatsoever?

Speaker 2 (03:53):
Right, I mean, you're right. If they'd had forty riders,
they probably could have found one joke of night for Biden. True,
because he was just so unfunny. There was nothing funny about.
I mean, all you had to do was just tell
the truth. Well, the truth was sad, not funny. Let's
go back and do some historical logic. The network day

(04:18):
used to be like a chain, like literally a metal chain,
and late night was a link. If I used to
do this, if I fell asleep with a network on,
when I turned on the TV, same channel was there,
and eyeballs rolled directly into the morning news, the daytime

(04:41):
game shows, the soap operas. Morning blocks are still major
profit centers, both for television and radio. Late night, even
though not wildly profitable, it still pulled its weight by
feeding the morning programs. The executives could just to fy
a mediocre late night margin because the downstream effect was visible.

(05:05):
The show's also doubled as in house promotion for whatever
was going on the next day, for primetime sports, whatever
it was, it was an ecosystem. It was a coherent ecosystem,
and that ecosystem at one point was only challenged by CNN.
That was it. Well maybe PBS, So you got PBS

(05:29):
and maybe CNN, and then that ecosystem fed itself. Why
do you think here we run promos for programs following
me or my program runs promos over on Freedom for
the Saturday program plus throughout the day here for tomorrow's program.
We want you to stay here our television. We've got

(05:57):
smart TVs, so our a smart TV will boot our
smart TV. I don't know about your smart TV. My
smart TV is smarter than you're smart TV. We need
a new bumpersticker right there. My child's not our student,
yours isn't. Oh my god, well you know the other one.
I thought, I saw yesterday Dragon that bugs me that
I think is of blatant lie that people are just

(06:18):
putting on be patient student driver. I pulled up to
red light behind one of those, and I thought, that's bullcrap.
There's not a student driver in there. You just put
that on. There's the people with you know, road rage
at you. My smart TV, which is smarter than your
smart TV. When we turn it on, it boots up,

(06:40):
but it doesn't boot up to an operating system. Some
boot up to an operating system and then you have
the menu there. Well, ours boots up to an operating
system with the menu there, but it automatically goes to
the channel that we last had it on stream devices,
you log onto Netflix right now, Oh, they'll be down

(07:04):
at the bottom, depending on the side of whether you're
using a laptop desktop of your television as your monitor.
You log onto Netflix and it will what It will
greet you with a menu, not the last broadcast signal.

Speaker 4 (07:20):
Now.

Speaker 2 (07:21):
Netflix also has down here on the lower left hand corner.
If I remember correctly, continue watching, for like, if I've
logged in as Michael or Tamer's logged in as Tamra
or Dragon who tries to steal my Netflix logs in
as one of my children. Then it will show do
you want to continue watching xyz? It's not the last
broadcast signal, So viewers do not drift from a monologue

(07:44):
to a morning show while they're sleeping. They get up
in the morning fresh at night. They may have chosen Netflix,
YouTube X, maybe not, and most likely not a network talker.
The overnight retention story, which once justified carrying late night
like Blast, which what it really was, it just doesn't

(08:07):
apply anymore now. Without that story, every show now has
to stand on its own economics because the sum's no
longer add up. There is no trail, there is no
long term effect, There is no ecosystem anymore. The ecosystem
is now a giant ocean. The ecosystem is now streaming

(08:30):
and all of those services over the air, television and
cable and broadcasts, all of that stuff. At the same
time that that's changing, costs went the other direction. If
you were a late night host and you took over,
say back in twenty ten, sometimes you negotiated a salary

(08:51):
that reflected those old economics. How much of an audience
could you get on how much of an audience could
Leno or Letterman get and maintain that audience. So when
they turned their TV off, whether they set it for
a timer or they physically turned the TV off. The
next morning when they turn on the television, they woke
up to either the CBS Morning News or they woke

(09:12):
up to the Today Show. No, not at all, So
that benefits no longer there. Yet these talk show hosts
are still demanding these high salaries, all these dollars that
sent a top other heavy costs the writers, the segment producers,

(09:32):
a support staff, a union crew, a houseman, a stage
in Manhattan or LA and then a nightly turn of
guests who expect to be paid for their travel and
for their lodging. Anytime I went to New York to
appear on a late night show or I would appear

(09:54):
on Fox News, yeah, it was usually two nights in
hotel because they always wanted you. They wanted to make
sure you got there. Like if I were appearing on
Kavoodo Live or something, which was in the afternoon, Oh,
I couldn't take an early morning flight. They wanted me
to fly in the next day. Now, most of the
time Fox was very lenient, although post COVID. That's totally changed.

(10:17):
Fox would pay for the night of arrival, and then
you know, I'd be on my own for the day.
Show up at you know, noontime, Go make up, Go
sit in the green room, do my appearance, made me
make maybe make an appearance on another show since I'm
already there, Finish up, go back to the hotel, catch

(10:40):
a flight out the next morning. Post COVID, well one
forget COVID for a moment. The networks can't even afford
to do that anymore. Fox News rarely does that. Oh
they'll put somebody on the acella and take them up
from d C up to New York, or from New
York down to d C, but they rarely bring people
in from Los Angeles or Denver anywhere else. And post

(11:04):
COVID has gotten even worse. The last US There is
a production studio in Denver. MFG Studios used to use
them all the time. I go there for CNN, MSNBC
or anybody else. I'm not I feel sorry for those guys.
I'm not sure what they do now. I'm sure they still,
you know, because they have they have satellite. They get

(11:24):
satellite time to and this or CNN would get satellite
time and they would use that. But post COVID what changed.
Everybody went online because nobody could travel. And now that's
become the norm now not necessarily for a light late
night talk show host because you want to guess sitting there.
So they still had those costs, but cable TV has

(11:47):
reduced those costs by saying, hey, Brown, we want you
on this afternoon on X y Z show. Okay, uh,
what are we using? Well, they're using well, Skype's gone away,
maybe Skype teams zoom or something like that. And they'd
have a dedicated secure line that was, you know, really

(12:07):
good to use. And then all these people like me
started putting in the lighting in our studios and everything else.
But all that's changed, it's all changed. The result is
a nine figure annual budget, nine figures for a flagship
and an eight figure budget for the twelve thirty Eastern slot,

(12:31):
and then when ad revenues falls by half, the structure
falls completely apart. I want to give you an example,
and it's not Kimmel. CB announced CBS, you know, they
announced that its most watched late night program, Stephen Colbert,

(12:51):
will end next year for financial reasons despite winning in
its time period. Now I think it started losing recently
to Gutfeld from Fox News. So here you had a
broadcast late night show losing to a cable late night
show gut Field. Gutfeld has has now dominated the ratings

(13:14):
in those time slots. Now, according to the Trades, Colbert's
annual production cost was nearly one hundred million dollars. It's
annual losses around forty million dollars. AD revenue went from
one hundred and twenty one million dollars in twenty eighteen
to only seventy million dollars in twenty twenty four. You

(13:35):
do the math, absolutely, do the math, whatever the proximate,
cause the balance sheet always matters. Television radio, whatever the
balance sheets won't matter. There's there's a group called Icepot
that tracks stuff. They tracked just under seventy million dollars
in AD revenue to date, which sounds healthy, right until

(13:57):
you stack that against an all in budget that sits
at somewhere between eighty to ninety million dollars, including a
host salary near sixteen million dollars and a large union staff. NBC,
while still keeping all their franchises, has started trimming back
and trimming back aggressively. They eliminated the See I didn't

(14:20):
realize this. I started doing research. I didn't know that
NBC had eliminated the house band. They did that in
twenty twenty four to save millions of dollars per year.
Now that is an admission that the format's late night
format fixed costs outstripped the value. Dragon. We need a band,

(14:42):
We need a band sitting in here. Sure, why not? Yeah,
why not? Let's get a band.

Speaker 3 (14:47):
My heart's got the funding to fix our windows, so
why not pay for a house band.

Speaker 2 (14:51):
Well, the money they're saving and all fixing the windows
and the blinds and everything else, they could use it
for a little four piece band here, you know, a
little like the Beatles or something. Four piece man, couple
of guitars, drums, vocals. Man were set at twelve thirty
on ces CBS. The network exited original programming this year

(15:19):
after canceling It's what you call a panel show. Other
exits fit exactly the same pattern. NBC candles canceled it's
one thirty seven AM Talker back in twenty twenty one.
TBS ended a program called Full Frontal, it's late night
program in twenty twenty two. Now part I think part

(15:41):
of that was because of a merger shakeup. Showtime closed.
It's in twenty twenty two. So when you give a
network any excuse, they're going to take the exit ram Interestingly,
late night TV did not always lose money in the
age of Johnny Carson er Jay Leno. Those were profit centers.

(16:06):
Those were gigantic revenue streams. Even into the mid twenty tens,
the number one show could pull three to four million
viewers every single night and spin off strong advertising packages.
The whole salary, you know, that was sustainable. Johnny wants what, Yeah,
we'll pay that. Lino once what, Yeah, We'll pay that
because the surrounding revenues were there to support it and

(16:28):
still make a profit. The technological hinge arrived in two parts.
I Love this city could be we're so accustomed to
what we have right now that we forget the history
and how much it's changed all of our viewing and
listening habits DVRs. Oh my god, you mean I don't

(16:49):
have to stay up till midnight? You mean I can
record this and just watch what I want. Oh, it's
skipped through the commercials too, and then on demand you know,
we talk about appointment listening, and well there was appointment
viewing and television well streaming services apps they completely cut off.

(17:10):
They severed the overnight channel inertia. When a TV reboots
to a home screen or a streaming app, the network
loses its tailwind, it loses that connection. And once that
connection is gone, guess what Now that late night program
has to pay for itself, and in most cases it
simply cannot. Now, I think there's a natural question to this.

(17:32):
If digital clips reach millions, why do they not close
the gap? Well, that's because of advertising economics. Linear TV
sold thirty second spots at a premium CPM. That's an
audience measurement used by Nilsen with co viewing and brand

(17:56):
safety that the big sponsors trust and that they demand.
They want to know you're safe, they want to know
you're consistent, they want to know. You know, we're willing
to pay that premium in order to get that rating
by Nielsen because that shows that we're getting that many
eyeballs for that many years. A five million view clip,

(18:20):
just with decent monetization, that yields a few hundred thousand
dollars at the best.

Speaker 5 (18:29):
Michael A quick Google search shows that Johnny Carson, or
the entirety of his career, had five writers, just five.

Speaker 2 (18:41):
Oh, I didn't look that up. That's amazing. Five writers.
And I wonder how much of his own material he
did too. I suppose television is like government. It just
grows and grows and grows. So I just find it interesting, obviously,

(19:03):
because I'm involved in media and we've got all this
controversy surrounding, you know, Jimmy Kimmel. It's important though for
us to understand what's going on because this affects what
we know about the world around us, unfortunately, and there's

(19:27):
no practical, other practical way to do this. The only
way to know what's going on around the world. Think
about it. When I was growing up, the way to
find out what was going on around the world was
you either had to subscribe to newspapers and wait for
the New York Times or the Washington Post to show up,
you know, three days later in the mail. Maybe get

(19:50):
the Wall Street Journal delivered that day, Listen to the
three broadcast networks ABC, CBS, and NBC, read state paper,
the local newspaper magazines. That was a good source of information,
but they arrived, you know, time news week. They only

(20:11):
arrived once a week. No internet, no streaming services. Movies,
Oh my gosh. When HBO came out, Oh my gosh,
that was like, that's the big time now, and everybody
subscribed to HBO. That's why we can watch movies now.
And then Blockbuster. Oh my gosh, let's go to Blockbuster.

(20:32):
Oh they don't have that. Oh what would you do?
You go righte up? Has he may turn this movie in? Yet?
This is this movie here? Yet all of that's changed,
And now you can go anywhere you want to, and
you can time shift anything you want to. I'm always
curious about my podcast numbers, so during the break, I

(20:54):
looked at my podcast numbers. They still outrank everybody else
in the building. Now, I think that's because I draw
in a national audience, but nonetheless because I'm just so
damned competitive. I love those numbers. But think about what
those numbers mean. Those numbers mean that people are listening
to what I'm saying right now, a day or two

(21:15):
from now, or maybe later this afternoon or tonight. You know,
when you can't sleep, and you know I'm as good
as Zambi, and so you take me you just do
me at night. So go back to that digital clip
that reaches millions, And it all has to do with economics.
YouTube and social media clicks carry lower CPMs, lower watch

(21:38):
through and revenue splits that favor the platform. So if
you if you're a so called influencer and you're making
money on substack or YouTube or Instagram or anywhere else,
you're sharing some of that revenue with that platform. So
a five million view clip with somewhat decent monitors, monetization

(22:01):
will get you a few hundred thousand dollars at best,
but often a lot less than that once the splits
or you get demonetized, or it's a one time deal. Now,
if you're getting five million views and you're constantly doing
that with everything you put up, then yeah, you're making
You're you're making some good scratch on that. But the

(22:25):
shows on broadcast TV have fixed costs that are weekly
and set and constantly rising. Digital is a good top
of final tool, but it's not a replacement for the
core broadcast or the markets that once made that genre
a cash cow. And it's not just the technology. We

(22:51):
forget that. There's illegal and there's a regulatory climate surrounding
all of this too, but as a multiplier rather than
a multiplier, rather than a driver, because the affiliates face
their own economics and they have a lot less margin,
a lot less ability to shift dollars around or to

(23:16):
take a loss here because we make up for it
somewhere else. So they the affiliates have a lot less
patience for any sort of content that triggers complaints or
that invites regulatory scrutiny. And I'd say even ten years ago,

(23:37):
a blow up might be costed into the relationship, because
there are always blow ups. But today the affiliates, well,
they're a lot less willing to carry the heat for
a show that's not paying it's freight to begin with,
and that they're paying to carry, and that they're losing
advertising dollars are So that results in a brittle, almost

(23:59):
adversary relationship between the network, the station groups, and the show.
So you have this triangle of people that are all
fighting over limited dollars that keep getting sucked away by
the changes in technology and the way we consume content.
So what happens. People get suspended, schedule changes, cancelations, any

(24:22):
number of things. Some object that if you've got a
really prestigious show program that offsets the red ink that
you're encouraging. I would argue that, yeah, there may have

(24:43):
been a time when that was true, because the late
night show was promoting the rest of the network's programming.
For example, even this year, a sketch that goes viral
promotes itself more than the network, and it does so
on platforms that don't guarantee you're going to go tune

(25:04):
in at eight pm or seven am or whatever it is.
How many times do I play i'd if I play
Bill Maher or Cobert or Kimmel or anybody else. Do
you actually think I've watched that? Do you think I
watched that program? No? Now, I know there are some
programs I shouldn't say program. I know there's some podcasts

(25:27):
that only lay down two or three episodes a week,
and they spend their entire time watching other programs, and
then that's what they talk about, or they use sound
bites from that, and they've actually watched the program. I'm
telling you that I may be watching something on Fox
or MSNBC and it catches my eye, catches my ear,

(25:50):
and I think, oh, let me make a note of that,
and then I'll see if I can find that. But
I would say that ninety nine percent of the time
the sound that you hear on this program comes from
something that I have not watched. I the last time
that I consciously Now I do it consistently, but I

(26:13):
wanted to make sure while I was watching something that
I watched what everybody else was doing. And of course
that was the Kirk Memorial because I wanted to see
what the networks obviously playing football because it was Sunday,
and I wanted to see what Cable was doing. Well,
as I kind of swerved in and out that memorial service,

(26:34):
when there was somebody on stage speaking that wasn't a
big name, air quotes there, what were they doing? They
had a panel talking about it. Fox was wall to
wall C SPAN like coverage. That's the only time that
I can tell you that I consciously was going back
and forth because there was one story here and I
wanted to see what they were doing. Now other times

(26:58):
I will, as I'm doing showpreer, just turn on MSNBC
or turn on CNN, just have that as the background
noise for a while, just kind of hear what they're doing.
But it doesn't mean that the clip that I played
from CNN came from a show that was on while
I was doing show prep. It means that I found
a story in which that clip had gone viral, or

(27:20):
that clip was part of a story that I was using,
and so I downloaded, I put it into my notes.
But the U R L of my notes and I
played on there, I didn't see the program, not at all.
So you think about what you see when you're going
through your timeline on X or Facebook or Instagram or
anything else, and you see something that's from Bill Maher,

(27:43):
you watch it. Does that mean that you tuned into
Bill Maher the next day? No, you just watched the clip.
So that might that clip itself might monetize if it
was put up by Bill Maher, it might put up
some revenue for a but very little revenue to offset

(28:04):
the cost of producing that program. In other words, the
viral claim that I mean, the viral sketch really doesn't
do anything to add to the bottom line of covering
the cost of the Bill Maher program. That's how radically
different our consumption of entertainment and news is today. You

(28:25):
pay somebody as a host, gigantic salaries, bands all of
that writers, while was it twenty or more? You got
millions of dollars. And that's even before the residuals kick in.
Think about the cost of stages in New York or LA,

(28:46):
all with union labor high even for daytime production, let
alone a nightly hour every music performance licensing. That's why
I get pissed off every time, because while we license
every week, we have license with ASKAP and b M
I I can play them here, but we can't do

(29:07):
it on the podcast because they want the MOO law
for that and I heart won't pay for it.

Speaker 1 (29:12):
Michael, you took an incredibly long time explaining to us
why you don't have writers on your show. We could
tell you don't have writers on your show?

Speaker 2 (29:25):
Sucks, screw you. Yeah, how many other choices did you
have to pick from for talkbacks? There's a couple, Yeah,
there were a couple. Uh huh. Yeah. I don't leave them.

(29:46):
I just play them and I choose them. I read
them and I choose them. So Trumps speaking at the
u N right now, but I want to go back
to UN Secretary General good tear us. He had a
few things to say that I find absolutely absurd.

Speaker 6 (30:08):
Is fossil fools are losing bets. Last years, almost.

Speaker 2 (30:14):
All news fossil fuels are losing bet Hmmm, my shares
of excellent are doing pretty well.

Speaker 6 (30:19):
Two power capacity came from renewables and the investment is charging.
Renewables are the cheapest and fastest source of new powers.
They create jobs, drive growth, shoot the economies from volatile
oil and gas markets.

Speaker 2 (30:36):
Ask you how they're doing with all their renewables. Ask
us hell, how does EV sales going? Mister Secretary General,
how's that going? How's that working out? For everybody?

Speaker 6 (30:46):
Connect and connective and can free us from the tyranny
of fossil fools.

Speaker 2 (30:52):
Oh, the tyranny of fossil fuels. We must be howbout
we be free from the tyranny of the United Nations
tyrannyes Well, listen to this.

Speaker 4 (30:59):
We us choose climate justice. The climate crisis is accelerating,
but so are the solutions. The clean energy future is
no longer a distant promise. It's already here. No government,
industry or special interest can stop it.

Speaker 2 (31:21):
Oh, really, you're the freaking United Nations. You don't tell
us what to do. We must choose climate justice. No,
we don't have to do that. The climate crisis is accelerating. No,
it is not. The solutions, well those are failing. It's
no longer a distant promise. It's already here and no government, industry,

(31:44):
or special interest group can stop it.

Speaker 4 (31:47):
You're full of crap, but some are training, hurting economies,
locking in higher prices, and squandering a historic opportunity.

Speaker 2 (32:01):
Explain to me again why a member of the United Nations,
why do we care about this organization