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June 2012
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What's next for CBS, post Letterman?

By Scott Collins and Meredith Blake Los Angeles Times

The scramble to succeed late-night host David Letterman has talent handlers and Las Vegas oddsmakers shouting their picks from the sidelines. Politicians are squabbling over whether his replacement should be based in Los Angeles or New York.

But those issues may be the least of the worries for CBS, which must program for a vastly different TV landscape than when it hired Letterman away from NBC 21 years ago to launch its "Late Show" franchise.

The late-night field is more crowded, profits aren't what they used to be, and the audience is now a lot older. All that could lead CBS to take a gamble and try something besides another show featuring a stand-up comic and celebrity interviews, analysts say.

"CBS will look at a lot of possibilities post-'Late Show,'" said Brad Adgate, analyst for ad firm Horizon Media. "They took that approach when Dan Rather left as anchor of the 'Evening News' before picking Katie Couric."

He and other analysts believe a priority will be attracting younger viewers, who are prized by advertisers but in increasingly short supply.

The median age of the Letterman viewer is now a relatively hoary 58, while young adults raised on the Internet often don't even watch TV, choosing instead to snack on video outtakes on YouTube and other online platforms.

Then too, Letterman's ironic mockery, groundbreaking when he started on NBC's "Late Night" in 1982, now seems like just another voice in the vast media echo chamber. Letterman inspired so many imitators that the wee hours are now choking on more than 20 talk shows, with his chief rivals including Jimmy Fallon, Jimmy Kimmel, Conan O'Brien and Stephen Colbert.

All that competition has softened the numbers. The longest-running late-night host in the history of television could once count on bringing in around 4 million viewers per night but has lately sunk to less than 2.5 million, according to Nielsen.

"Late night is not what it was," said Gary Edgerton, professor at Butler University and author of "The Columbia History of American Television." "It's overpopulated; the number of viewers is so much lower."

Indeed, though CBS has yet to announce a successor, it's clear that the potential jackpot in late night is much smaller than it was when Letterman brought his Stupid Pet Tricks to CBS. At that time, Jay Leno had just taken over NBC's "The Tonight Show" after Johnny Carson, the undisputed king of late-night TV, retired.

Last year, "Late Show" brought in about $130 million in ad revenue for CBS, according to a top rival producer and trade reports. (A CBS spokesman declined to comment). That's down from more than $200 million as recently as 2007, according to Kantar Media.

"Ad revenue has been going down in the (late-night TV) category, but it remains really profitable for the networks," said Deana Myers, principal analyst for media research firm SNL Kagan.

Even so, the classic late-night format isn't cheap, with costs that include a live band, a large writing staff and richly compensated hosts. Letterman himself once earned a reported $30 million annually.

But the downturn in late-night ad revenue forced Letterman to take cuts in salary and staff recently, just as they did for Jay Leno before he left "Tonight." The NBC show was forced to lay off 20 staffers in an unprecedented move in 2012 as a new economic reality settled in.

In assessing their prospects, CBS executives could decide to ditch the crowded talk format. Adult Swim - the late-night animated block from Cartoon Network - draws big ratings, especially among hard-to-reach young men.

Then there is the succession problem.

Unlike NBC, which tapped its deep talent pool on "Saturday Night Live" to find hosts Fallon and Seth Meyers, CBS has no bench to speak of, aside from Craig Ferguson, the Scottish-born host of the off-kilter "Late Late Show" that follows Letterman. However, Ferguson is widely deemed too eccentric to appeal to a broader audience at 10:35 p.m.

Instead, popular speculation has centered on such names as Colbert (3-to-1 odds, according to one bookmaker), Chelsea Handler (who looks unlikely to return to her E! talk show) and even the Golden Globes hosting duo of Tina Fey and Amy Poehler (both have development deals with NBC).

"I think they'll have to look outside the network," Adgate said. "I don't know if anyone (at CBS) can take on the two Jimmys and Conan."

But in one telling sign of the odds facing CBS - America's most-watched network but also its oldest-skewing - consider the number of YouTube subscribers. Fallon's "Tonight Show" feasts on skits and games that translate well online and has been rewarded with nearly 3 million subscribers on the online video platform. Letterman's "Late Show," by contrast, posts only brief snippets from interviews and monologues and is just over 40,000.

Such a gulf creates obvious problems in today's media market.

"When the smoke cleared after Fallon's first couple of weeks, CBS realized it now had these two really strong competitors" in Fallon and ABC's Kimmel, said Robert Thompson, a media professor at Syracuse University. "CBS was going to want to get a little bit of that energy."

Letterman lost the "Tonight Show" succession battle to Leno, then slid behind him in the ratings race for most of their rivalry. But in a certain sense, Letterman may have emerged triumphant. Late-night TV is now filled with an approach he pioneered.

"Now everybody out there ... the two Jimmys and Conan and Ferguson and even Colbert and (Jon) Stewart, are doing what Letterman did," Thompson said. "He is the crown prince of the new age of irony. He did more of a parody of a talk show than a talk show itself, and that's what they're all doing now."

And the crown prince is ending his reign with jokes.

On Friday, Letterman cracked on his show: "A year from now, I'll be on the beach with a metal detector."

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