Leno In Primtime, Dramas To Pasture

Boy, this was a shocker!

When they announced that Conan O'Brien was taking over Tonight and that Jay would be a free agent, I heard all kinds of rumors. Would he jump to another network? Would he pull a Tom Green and go to the Internet? Would he simply retire gracefully and do club dates?

But it never occurred to me to consider the obvious: That NBC would find some way to keep him. It's brilliant!

Let's pull this deal apart:

• It's a money maker for everybody. NBC is bleeding cash on these expensive dramas that are tanking. Even if they double Leno's salary, they would still come out ahead. So Leno makes more, the network makes more and advertisers get more.
• It stems the obvious threat of Leno elsewhere. What a coup that would have been for another network! Having Jay competing against his own show would have been classic. Even if it didn't beat The Tonight Show, it would have serious impacted ad revenue.
• It's thought leadership on display. As a buyer you have to look at NBC now as the smartest player in the pack, willing to take risks to give maximum sponsorship benefit. You better believe this will affect how people view them in the upfronts. It's subtle, but it's there.

The other thing that's not being mentioned is how the Writer's strike is partially to blame for this. Everything I predicted about the outcome of that strike is now coming true. I said so in another blog, on forums and on The BeanCast, my marketing podcast. Dramas have become too expensive to produce without getting immediate, huge returns. So while the deal is good for the writers, now there will be less of those deals and the net outcome to income is in the negative. The networks simply won't bet on anything other than a sure thing now, which means less chances, less creativity and less jobs.

Now in spite of my bullishness about the deal, we have to look critically. Because while media buyers are welcoming the news, creatives I've talked to are concerned. This proposal homogenizes the audience, so there will be less segments and less creative executions to explore. This is worrisome for creative-types because it does put media buyers more in control of the broadcast ad strategy.

We also have to see what happens to the network with the loss of DVD revenue. Will the influx of "sure-thing" ad dollars offset the loss of all those DVD box sets that won't be there in the future? The jury is out.

And finally, we have to wonder (as Ad Age did) whether the presence of Jay at 10pm will cannabalize the audience for Conan at 11:30pm. It's critical that this not happen.

But overall, my prediction is that this will be an unmitigated success. NBC is playing too many aces in this hand and I'm looking forward to seeing how this shapes the future of broadcast.