Conan O’Brien, last night: “NBC announced they plan to lose $200 million on the Winter Olympics next month. Folks, is it just me, or is that story hilarious?”
NBC’s talk show lineup was doomed from the start. Its failure was less of a surprise than AOL-Time Warner, Terrell Owens’ tenure with the Cowboys, or Olestra anal-leakage potato chips. And the disaster is unrelenting for NBC, now with every personality on NBC — and CBS — taking shots at the cellar-dweller of the legacy broadcast network division.
This isn’t just a FAIL. It’s an EPIC FAIL. Let’s count the individual failures at work, and see what we can learn.
1. A failure of imagination. For its supposedly radical yet retro concept (a nightly talk show in prime time), The Jay Leno Show concept was shockingly conservative. It assumed that America wanted to sit back and watch the same guy do a show every night, because that was the late night model for the prior 50 years. Now as NBC tries to fix its mess, it’s sticking with this conceptual model. How about moving Leno back to The Tonight Show and letting Conan host a prime-time variety/sketch show two nights a week? How about trying out something — anything – that’s really different? The times demand innovation.
2. A failure to think about competition. At 11:30pm, a talk show has traditionally competed with other, similar talk shows, news, and syndicated reruns. The 500-channel environment and DVRs didn’t change that so much. But 10pm is still called “prime time” for a reason. It’s a place to showcase top-quality content that grown-ups watch on their couches, and against that, Leno interviewing sit-com actresses looked like piffle.
3. A failure to understand the customer. The ratings at the end of a late-night talk show is a fraction of that of the beginning of a show. After the initial monologue and comedy bits, people tend to bail out, flip around, or just turn it off and go to bed. At 10pm, audience retention is critical, since affiliates make all their money at 11 on the local news. And the real reason why Leno is being kicked out of the 10pm slot is because his show’s format didn’t retain its audience, thus killing NBC affiliates’ 11pm news ratings.
4. A failure to consider revenue. Tina Fey declared a few years ago that working in broadcast in the ’00s was like working in vaudeville in the 1960s. The old model has been disrupted by technology and choice — four networks, replaced by hundreds of networks plus iTunes plus web video plus DVDs plus on-demand, ad infinitum – but the new models produce revenue, too. An hour-long drama can cost millions per episode, and failure is expensive. But success is also richly rewarded via syndication, DVD sales, and international rights. The Jay Leno Show is cheap but low-margin, and most episodes are nearly worthless the minute after it airs.
5. A failure to think downstream. The Leno-to-10pm move was in part a move to retain Conan O’Brien, who had toiled for more than 15 years at 12:35am. But with Leno sucking up the A-list in prime time, Conan got left with the B-list. A Friday episode of The Tonight Show used to mean a top draw. But a few weeks ago, their Friday lead guest was Jeff Garlin, a funny guy but not at the level you’d want in that slot.
6. A failure to plan for failure. The current ad-libbing on the part of NBC execs reveals that they never considered what to do next if Leno’s show were to underperform. It’s easy to cancel Knight Rider and find something else to fill its slot for a few weeks. But Leno occupies five hours of prime time, and even after returning from Winter Olympics programming next month, NBC simply won’t have enough content in the pipeline to deliver an audience to advertisers. Meanwhile, the treatment of O’Brien (and his Late Nite replacement Jimmy Fallon) makes NBC look like a network that doesn’t know how to handle its talent. Now who would choose to run a show there, over another network?
A year from now, this controversy will seem distant. Leno will be on at 11:35. Conan may be on at 12:05, or he may be launching the Late Night division at Fox.
But NBC will still be in fourth place.
John Battelle 
