Sunday, January 10, 2010

NBC Botches the Leno-O'Brien Affair, But the Real Story is the Demise of Network Television

[NOTE: The following article will also appear as my regular television column for WILDsound.]

Yes, I know. I have regularly criticized NBC in this space, so much so that I wrote a column promising to be nicer to the downtrodden network. So it is not surprising that I would now come out of my grad-school-imposed temporary sabbatical to rip NBC over the Conan O'Brien-Jay Leno debacle. But, really, the whole game of late-night musical chairs is as much about the changing television landscape as it is about the incompetence of NBC's executives.

Let's get the easy part out of the way: Every inch of the Jay Leno-Conan O'Brien dealings, going back to NBC's announcement in 2004 that O'Brien would take over the Tonight Show in 2009, has been mishandled by the network. Executives didn't want to lose O'Brien, so they made a we'll-worry-about-it-in-five-years decision to push Leno, who consistently won his time slot, out of his successful perch. Back in 2004 it was clear that there were three huge problems with this decision: 1) NBC was creating a lame-duck scenario for one of its biggest stars; 2) Leno was young enough that it was unlikely the notoriously hard-working comic would be ready to be put out to pasture in 2009; and 3) O'Brien was not (and probably never will be, which is, of course, a compliment) cut out for the bland, older-skewing Tonight Show audience, and there was no reason to believe that younger, hipper fans of David Letterman would automatically abandon CBS upon O'Brien's arrival to the 11:30 slot. (O'Brien's move from the New York-based Late Show to the L.A.-based Tonight Show was more than just geographic. It represented a change in comic sensibility, and there is nothing in O'Brien's history that gave even a hint that he would be a good fit for the by-the-book, don't-offend-middle-America world Leno had happily inhabited, and I was a fan of the Late Night O'Brien.)

Nevertheless, NBC kicked the can down the road, resolving nothing.

So the five years come and go, and NBC finds itself in the position of having to replace its successful Tonight Show host while he is still winning his time slot AND possibly lose him to another network where he could compete against O'Brien and the Tonight Show (and, in all likelihood, blow NBC away in the ratings). So what does NBC do? It goes full steam ahead with the destined-for-doom plan to move O'Brien west, but faced with Leno's departure, the powers that be again panic, just as they had five years earlier, and once again made a poorly conceived decision: The network, which had seen its prime-time ratings crash in the previous decade, raised a white flag and surrendered the 10 p.m. time slot, Monday through Friday, to Leno, abandoning fiction and reality programming for those five hours a week. The thinking was remarkably short-sighted: Since Leno's talk show would be far cheaper to produce than traditional programming, the network would not need a large audience to turn a profit. Apparently, the executives looked past the idea that they would be voluntarily turning away viewers, the lifeblood of any network.

Well, it only took less than four months for NBC's panic decisions to blow up in its face. O'Brien, despite holding the advantage of attracting bigger stars to his L.A.-based program, slipped behind Letterman in the ratings. At the same time, Leno's audience, which was similar in number of viewers to his performance on the Tonight Show, was small by prime-time standards, a problem not only in itself, but in the diminished ratings of local news programs, which now had a far weaker lead-in. (A network can do a lot of things wrong, but the one cardinal sin is pissing off its affiliates.) And all of this was foreseeable.

So NBC is now panicking, trying to call a do-over on its 2009 move (something it could have avoided by leaving Leno in place in 2009 before it invested in Leno's and O'Brien's new gigs and, as importantly, did potentially irreparable damage by abandoning the 10 p.m. block). It wants to move Leno back to 11:35 after the Olympics, pushing O'Brien to 12:05. Reportedly, O'Brien can either accept the move or leave the network (Fox is a potential soft-landing spot). NBC might be able to pull off the move, but the damage has been done. Leno has been dented a bit, O'Brien becomes a potential competitor (one with a sympathetic storyline following him wherever he goes), and the network is far behind ABC, CBS and Fox in developing programming for 10:00 p.m. And who is to say that those lost viewers, at both the network and local level, will be so easily won back?

In short, for NBC, the whole thing is nothing short of a management debacle, one of Matt-Millen-in-Detroit proportions.

As I said, though, this is about more than NBC. Or maybe it is more precise to say that this whole mess, especially the Leno-to-prime-time experiment, is an example of a network not recognizing that the entire television system, as we've known it for the last 60 or so years, is falling apart.

Consider this: In November, ABC, CBS and NBC all saw double-digit declines in ratings from 2008's November sweeps in the key 18-49 demographic advertisers desire. (Even Univision fell 13 percent from 2008. Fox was up 17 percent, but much of that is due to the quirk that the 2008 World Series ended in October, while the 2009 edition, which was highly rated, slipped into November, thanks to World Baseball Classic delaying the start of the season). While ABC was off 11 percent from 2008 and CBS fell 12 percent from the previous year, NBC experienced a whopping 16 percent decline. Over all, from 2008 to 2009, prime-time ratings took a beating: CBS dropped 2.9 percent, ABC fell 9.7 percent, NBC was off 14.3 percent, and Fox experienced a 17.5 percent plummet.

Network television is in a free fall. Twenty-five years of growing cable television and 10 years of rampaging growth in Internet use, along with the rise of the digital video recorder (allowing viewers to bypass commercials) has taken its toll. (As has the niching of America, as cable and the Internet have allowed increasingly self-sorting Americans to seek out content that matches their specific interests, making it harder to attract a mass audience for nearly anything.) A slow erosion in ratings has started to spiral into an abyss. Bob Garfield, host of NPR's On the Media, argues in his book "The Chaos Scenario" that 40 percent of advertisers will reduce television spending when DVR penetration reaches 40 percent (in 2009, 32 percent of television households had a DVR). His prediction is that will happen in 2012.

The entire industry is in trouble. Television was once able to assemble a mass audience for advertisers, but with each passing year, that ability is eroding. And when NBC executives make questionable moves like they have in the Leno-O'Brien saga, it only accelerates the damage.

So yes, I'm here to once again say to NBC, "What the hell were you thinking?" But unlike the network's decision to air a whole season of Kath and Kim or program rip-off reality shows like Momma's Boys or Superstars of Dance, the botching of its late night and 10 p.m. blocks is indicative of a much larger problem. It will take smarts and creativity for television networks to adapt and prosper in the face of a rapidly changing media environment. Which must be terrifying for General Electric (and, soon, Comcast), since NBC's executives have not demonstrated much awareness and understanding in handling Leno and O'Brien.