Last Laugh
Audio Recording by George Hahn
It’s getting awfully late, early, for late-night TV.
Stephen Colbert shocked his audience on July 17 with the news that CBS had canceled The Late Show. I interpreted it as the latest sign of America’s descent into fascism — another media company bending the knee. The headlines came just three days after Colbert slammed Paramount’s decision to pay Trump $16 million to settle a nuisance lawsuit over the editing of a 60 Minutes interview, calling it a “big fat bribe.” CBS is part of Paramount, which needed the Trump administration to bless the transfer of billions from one billionaire nepobaby (David Ellison) to another billionaire nepobaby (Shari Redstone). At some point, people will notice the only ones willing to buy media companies are rich kids who didn’t have to actually make any money. But I digress.
I was wrong about Colbert. Economics are driving him out, not politics. Granted, two things can be true at once, and Colbert’s constant ribbing of the president probably made his walk on the green mile shorter. But, let’s be clear … winter was coming. This is an overdue reshaping of the supply chain in TV. Colbert isn’t going anywhere, it’s 185 of the 200 people working for him who are going to be getting their real estate licenses. The media reaction was outrage. Nothing is more precious than a 60-something comedian, who earns 100x what his staff makes, getting furious at the suits.
But the opportunistic infection that took a weakened late-night show down was the WGA’s decision to go on strike in 2023. Netflix and, to a lesser extent, scripted TV had enough shows in the bank to hang on to all or most of their audience, respectively, for about five months. But nobody was going to tune in to Jimmy Kimmel to see Michael Avenatti … again. When late-night went dark, millions of Americans realized they didn’t miss it, and they never returned. Jon Stewart should tell the WGA board, not Paramount’s management, to go fuck themselves.
Glory Days
Johnny Carson, the “king of late night” during his three-decade run as host of The Tonight Show, attracted a nightly audience of 10 million to 15 million at his peak. Adjusted for population growth, that would be like 25 million people tuning in tonight. By the late ’70s, Tonight accounted for 17% of NBC’s revenue. In 1988, a few years before Carson handed the reins to Jay Leno, advertising dollars spent on late-night TV surged to more than $1.2 billion, as carmakers, beverage companies, and movie studios rushed to win over younger, more affluent consumers.
In 2002, Leno’s show routinely attracted more than 5 million viewers a night — still strong — and late-night shows continued to deliver into the next decade. About 15 years ago, a popular late-night program could earn about $100 million a year.
Those days are gone. The entertainment sector has experienced a seismic shift, with late-night-TV advertising revenue collapsing 50%, to an estimated $220 million in 2024 from $439 million in 2018, according to data firm Guideline. In the five years leading up to its Chapter 11 filing, General Motors’ revenue declined 40%. In sum, if late-night television were a stand-alone business, it would have declared bankruptcy last year.
During the last two months — for the first time ever — viewers spent more time watching streaming services, including YouTube and Netflix, than the broadcast and cable networks combined. We’re still catching the highlight clips of late-night TV. But, as they do with the rest of media, technology platforms rent the content for 2 cents on the dollar.
It isn’t the end of Colbert. It’s the end of late-night TV. Colbert’s Late Show reportedly has been losing more than $40 million a year for CBS, with a budget of $100 million per season and about 200 employees. Colbert quipped: “I could see us losing $24 million, but where would Paramount have possibly spent the other $16 million? Oh, yeah.” Assuming the show is reeling in $60 million a year in revenue, that equates to $300,000 per employee. But less than 10% of The Late Show’s audience is between 18 and 49 years old, that coveted demographic still in their mating years and making irrational, high-margin purchases. And one of the key insights from the 2024 election is that podcast listeners swing elections, as they are (much) younger and more likely to be swayed. Nine out of 10 people who watch cable news and late-night, from an economic lens, don’t matter.
From Carlson to Conan
Think about it: As a percentage of the population, late-night has shed 90% of its audience over the past several decades. Contrast Colbert with our company, Prof G Media. (I never miss the opportunity to boast.) We expect to generate $15 million to $20 million in annual revenue next year, with about 15 full-time people. That figure, which excludes my podcast Pivot with Kara Swisher, equates to $1 million to $1.3 million per employee. Unlike the late-night category, we’re growing 20% to 30% annually, with half of our listeners in the 18-49 age bracket. We’re reaching nearly as many of the core demographic as late-night with 8% of the staff/cost.
Talent Wins
TV’s biggest stars are simply arbitraging the means of production (i.e., losing 90% of their staff). The talent in front of the camera/mic has figured out how to hold on to their income and cultural relevance by reducing production costs.
When Fox News fired Tucker Carlson in 2023 — a week after the network settled a defamation lawsuit with Dominion Voting Systems for almost $800 million — he embraced his newfound independence. The Tucker Carlson Show averaged 1.06 million views throughout most of June and sat at No. 11 on YouTube’s podcast rankings last week. Even if his audience is smaller than it was previously, he’s likely capturing similar economic value (i.e., pay) with a smaller team. Podcasts are TV … just more efficient.
Megyn Kelly, ousted from NBC in 2019, is another example. Semafor reported last year that her Megyn Kelly Show was drawing audiences comparable to those of the legacy media outlets — with only six employees. The show, among the most followed political podcasts in the U.S., had 3.5 million subscribers in March.
Finally, consider Conan O’Brien, who hosted Late Night and The Tonight Show, both on NBC, and then Conan on TBS. I’d speculate that O’Brien, who launched the weekly podcast Conan O’Brien Needs a Friend in 2018 and later sold his podcast business to SiriusXM for $150 million, is making more money today than he did in his late-night heyday. The 150 people who worked at Late Night? See above: real estate agents.
From Bad to Worse
Even though his audience has dropped from a peak of more than 3.1 million viewers in 2017-18, Colbert enjoys better ratings than his competitors, Jimmy Kimmel and Jimmy Fallon, registering an average of 2.42 million viewers during the three-month period ending in June. That compared with 1.77 million and 1.19 million for Kimmel and Fallon, respectively. If Colbert can’t hang on, it doesn’t bode well for his rivals or the staff who don’t make it onto the podcast arc with their boss.
Colbert, Fallon, and Kimmel shouldn’t be worried. They are caged in a broken business model, and it’s only a matter of time before they break free. In his first broadcast since CBS pulled the plug, Colbert earlier this week warned Trump that the “gloves are off.” When his contract ends in 10 months, the economic shackles will also come off. Instead of leading a $60 million business with 200 staff, Colbert will likely helm a $20 million business with 12 highly skilled people. These shows might lack the glitz and glamor of late-night. But that can be an advantage, as Colbert demonstrated during the pandemic, when he delivered monologues at home without a live audience, his wife, Evie Colbert, by his side.
More stars will follow Colbert into the next frontier after he leaves the late-night stage. MSNBC’s Rachel Maddow, who’s already reduced her on-air commitments to pursue podcasts, may not be able to match the $25 million salary she reportedly negotiated at the network, but her current compensation is unsustainable … and she knows it.
Primetime for Podcasts
When it returned to its traditional format in the Ed Sullivan Theater in June 2021, The Late Show seemed eager to embrace the old-school model — and ditch everything it learned in lockdown. But the future looks more like Colbert at his vacation home in South Carolina than in front of a live audience with a band, Manhattan rent, and union workers. It means sharply lower production costs, with a lean team of 20, not 200. Call it the Old Navy of media: 80% of the production quality for a fifth of the price. The end is nigh for late-night TV. But podcasts delivering high-quality — and highly profitable — entertainment are just warming up.
RAF
Colbert will be just as relevant, and as much a pain in Trump’s ass, he’ll just do it via a different means of production. Podcasts are TV, but with an audio-first overlay and better unit economics. Commending the RAF in 1940, Winston Churchill said that never “was so much owed by so many to so few.” In cable news and late-night television, rarely have so many talented people been less relevant.
Life is so rich,
P.S. On the Prof G Pod Conversations this week I spoke with Michigan Governor Gretchen Whitmer about the future of the Democratic Party. Listen here on Apple or here on Spotify, or watch on YouTube.
30 Comments
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I don’t pay for ESPN but catch shows on Youtube. I listen to Spotify for podcasters. It is somewhat surprising that Paramount allowed the Late Night bleed for as long as they did. Finally a balanced piece again.
As Bob Lefstez writes, “we want our content when we want it, not when it’s scheduled”. Advertisers keep this going and are willing to pony up this money for a 0.017% of households. 98% go to bed and ignore these programs. And so it goes.
@Scott, brilliant analysis on late-night TV’s economic reality, but I think you’re witnessing something even bigger than media’s lean transformation.
What happens to unit economics when AI eliminates the “per employee” part entirely? Are we heading toward post-labor business models where marginal costs approach
With less research, and therefore likely less intellectual content, the wealth will be directed to a chosen few while hundreds will be out of a job. It may be a better business model, but I hesitate to say it what serves America.
Trump shuts down USAID and now shows that were losing $40M a year are forced to cancel.
Just turn off the funding and all these propaganda machines will run out of gas and shut down.
If you’ve ever wondered why the majority of pop culture today all feels the same and all sucks ass it’s because pop culture is not there to be good art or even be profitable, it’s there because it’s propaganda that’s being propped up by our tax dollars.
We’re living in The Final Days of The Soviet Union when all these propaganda machines are shutting down and falling apart.
Scott, this article was spot on! It is not that Stephen Colbert is no longer relevant. He is as relevant as ever! However, the late night broadcasting platform is an irrelevant dinosaur… and this observation is coming from a 69 year old Black female. Not exactly the demographic game-changer needed to pump life into a dying venue. But even I can see that this venue is gone, I am big on podcasts, streaming Netflix, Hulu and HBO Max. I don’t think I’m an anomaly… I think it’s just a change in the times. And many of my peers are changed viewership as well.
The broken media business model aside, Late Night used to actually be funny. Gone is any semblance of balanced critique fashioned from a comedic point of view. It used to be easy to laugh at both political parties and politicians because the delivery was creative and from a point of humor. Late Night now; who the hell wants to sit through an interview with an “Adam Schiff pontification” as the Special Guest ?! Seriously ?! . The Kimmels, and Colberts digressed to simply preaching with an overt agenda. Late Night devolved into a singularly biased, mean-spirited and narcissistic “evening political lesson”, at a time of night when audiences preferred to be entertained…. These “hosts” will just transition to a podcast that furthers isolates and silos their talking into an ever shrinking echo chamber of like-mindedness. There are plenty of talented, knowledgable hosts, and a few years from now Kimmel and Colbert will have spiraled into just another one of the hundred mediocre pods, hosted by unfunny has-beens.
I remember 15-20 years ago even people that didn’t watch late night would see video clips going viral or shared on MySpace the day after.
Jon Stewart clips used to go viral all the time, there’s still several that stand out to this day.
I can’t remember the last time that’s happened with current Late Night hosts.
Late night has become like a SNL walking dead zombie.
Matt Drudge makes what, like $3 million a year with four employees?
How about getting Michele Mulroney president of WGA west to present a counter to your strike position. Has there ever been a necessary strike in your opinion?
You’re no wrong… but what does it say about the state of “entertainment”when an NYU nabob can show ratings equivalence with a brilliant, socially adept comedian like Stephen. I want to die!
Great post.
I had already concluded that late night TV was dying.
Did not consider the efficiency of podcasts. Thanks for the info.
Doug, If you have not tried podcasts, you will be amazed at the level of professional, analytical, informative and factual information that can be provided to you anywhere, anytime. I have not viewed MSM (mainstream media) for over 2 years. And I don’t miss the one-sided persuasive lies fed to the masses.
My son suggested i watch a Joe Rogan podcast when Jordan Peterson was the guest. My kid had read Peterson’s 12 Rules book and apparently Rogan was a fan.
After viewing the show, I have to admit (and I know I’m not the target audience) It’s boring. Maybe young people take ponderous pauses and thinking out loud questions as a sign of intellect but Rogan is just a guy. A guy worth billions but just a guy. I don’t get the appeal. Peterson, for what it’s worth, knew his audience and pandered to Rogan. My son has a career and a life these days, no time for podcasts.
I wish Colbert well but I likely won’t follow him to his next media stop.
Stunning how many brainwashed MAGAts deem any satirizing of the Tangerine Ballbag to be “hard left”.
I agree streaming programming has been seriously eroding the programed TV-cable/network programming over the last years.
But TV exposure prompted viewers to stream content. Folks would not have been aware of many streaming personalities without having watched them first on TV.
I think you overrate the quality of podcasts. In my experience, most of them seem like no preparations were done prior to the mics being turned on. Too much meandering blather, not enough genuine entertainment or information. Maybe that will change. I guess we’ll see.
I really wish you would stay away from quoting Winston Churchill. This man was a crass racist and directly killed 4+ million Indians (please read about Bengal Famine). He is celebrated all over UK and USA. I know this is not relevant to this writing. As a public intellectual, it is good to know these things.
I did my own analysis on this because I didn’t want to necessarily blame Paramount unfairly. I determined that the Late Show should be making $100M in revenue and cost $50M to make. So clearly I did not realize how high those salaries actually are. But I do need to quibble on the revenue side. Most people I know watch Colbert on YouTube, not on broadcast. I would imagine those advertisers are paying way more than $60M, probably more like $100M. And if Paramount wanted to fix it, surely they could have done so.
Too political, turned off half the viewing audience with far left bent. Could have cut staff and salaries, moved to a cheaper city. Really need 200 staff to produce a one man show?
To me the greater loss is late night music. Fallon introduced us to Questlove, who has since added Prize-winning docs to his resume, and the Roots, a terrific band. And Colbert gave a push to Jon Batiste that has launched a huge career.
No mention that these guys on late night fail to make anyone laugh. You never knew who Johnny Carson voted for yet you consistently laughed at his jokes
This comment for the win.
Colbert is funnier on his worst day than Carson on his best.
Fuckoff!
Language!
You failed to mention that the late shows, except for Fallon, shifted hard left over the past couple of decades. And at least half of America has no appetite for snarky, finger-wagging elitists like Colbert and Kimmel. The ratings and the economics prove it. They’d have been much smarter to stick to entertainment instead.
Rex, and there is another one-half of America (or what used to be America) that has no appetite for far-right, hate-filled, anger baiting, low IQ bigots like Laura Ingrahm, Tucker Carlson and Steve Bannon. Some of us critical thinking adults want to hear news without the childish, ignorant name calling and outright lies (not distortions of the truths, but fat lies) which the far-right deems as “informative”. I think not.
Professor – you are among the most gifted, entertaining, educational and sardonic influencer/writer/ content creator that I have encountered. That said – I really enjoy your commentary in this ever changing, frightening and dystopian experience…
Still agree with the broad strokes of this but I watch Colbert on YouTube so would be interested whether the Nielsen figures are just looking at viewership on the traditional TV or including the literally millions of views per video from the 10+M subscribers on his channel.