Letterman prompted into retirement by digital changes

David Letterman's retirement was prompted not just by his years of service, but a digital shift in dynamics for Late Night TV

David Letterman’s retirement from the Late Show nearly made me cry.

He was a family member, through a screen, to me since as young as I can remember. I attribute a lot of my sensibilities to his sense of humor.

As sad as I was to see him go, like many folks I couldn’t help but feel it was time. It was time for Dave to retire not just because he’d been hosting late night TV for 33 years, but because the digital revolution had made his show and company, Worldwide Pants, a digital loser.

Late Night talk shows in the form of Johnny Carson were 60-90 minute variety shows that mixed delineated segments with running jokes throughout the show. Dave in particular was famous for the anti-skit: a somewhat meandering segment in which the joke was that there was no joke. The “Will it Float” gag tested if a particular item, you guessed it, would float. It only got funnier as the gag recurred over a seemingly hundreds of episodes.

The problem of course with meandering, self-referencing, recurring gags is that they are not well designed  for instant, self-contained consumption on the internet. You can’t really get the joke in a two minute clip. While you could say this is a cultural shift, that we now have shorter attention spans, I’d argue it is directly traceable to digital technology.

The technology (YouTube, Hulu, cheap cloud storage, recommendation algorithms, etc.) that allows each of us to seek out exactly the content we want at a given moment is what feeds that short attention span. We don’t have to sit through a whole show! In the analog world, content producers and networks had to find the middle – what is something a large block of people would likely watch for 30, 60 or more minutes? Digital technology has two affects that work against the Letterman-appeal-to-most model: content producers can sprinkle appealing bits throughout their programs targeted at different interests (some people will like Jimmy Fallon’s Lip Sync Battles, others will prefer Jimmy Fallon’s impressions) and secondly content in general is becoming more niche (there are more shows with smaller audiences).

In the terms of the course, you could say that Letterman was slowly creating value over time as he built a relationship with the audience – the “value” in a particular joke is the payoff of potentially several episodes of buildup. The Fallon clip-fueled model has to build value much more quickly, all within a standalone clip without other context.

Value capture is the really interesting thing to watch as this upending of Late Night continues. While the trend is clearly towards online, especially among the valuable younger viewing demographic, the ad dollars are slow to catch up. Late-night talk shows took in $597.5 million in ad dollars last year, an increase of 14% over the previous year (1). But it seems CBS can see that the value capture tide is turning: they hired Stephen Colbert to succeed Letterman, who saw an episode of his old cable show streamed 3.6 million times, three times more eyeballs than his average broadcast received that year (2).

Data isn’t available on the online revenue – but the big question remains: can it come anywhere near the traditional dollars brought in by TV commercials?

I’ll add that I don’t think Dave was clueless that the digital shift was happening and leaving him behind. The New York Times asked him if he purposefully avoided the late night war to create viral clips:

“No, it just came and went without me. It sneaked up on me and went right by. People on the staff said, “You know what would be great is if you would join Twitter.” And I recognized the value of it. It’s just, I didn’t know what to say. You go back to your parents’ house, and they still have the rotary phone. It’s a little like that.”(3)


As we wait and watch to see how this plays out, especially who captures the value of our shift content consumption, I’ll be playing the “Will It Float?” home game.

(1) http://time.com/money/4025147/stephen-colbert-late-show-salary/

(2) Ibid

(3) http://www.nytimes.com/2015/05/03/arts/television/david-letterman-reflects-on-33-years-in-late-night-television.html?_r=0


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Student comments on Letterman prompted into retirement by digital changes

  1. Really interesting application of how digital is changing consumption patterns across almost all industries. I’d agree that it’s certainly a big factor in the evolution of late night TV, but not necessarily that the clip-driven model is entirely new. SNL of course has been using a similar short skit-driven model for decades, likely recognizing that not all skits would appeal to all people as well. That said, the shift is even more pronounced now with the ability to view clips on-demand, as you point out (I’m a huge fan of Jimmy’s Lip Sync Battles, but have never seen an entire show).

    1. Yes, good point re: SNL, though I’d say anecdotally that SNL hasn’t built a digital clip distribution machine yet. If I watch SNL, its usually the whole show, not parts of that. I wonder if that has something to do with the content, or just their grasp of how to distribute it. NBC does both Fallon and SNL and from my limited knowledge of how these shows work, the shows are responsible for the content but the network chops them up and puts them on Hulu and so forth… which makes me wonder if it is actually the content of SNL (given that the same NBC team may be putting both into the digital ether).

  2. Jon – great blog! This is an interesting application of what we have learned thus far in class. Reading your blog made me realize that digital transformation not only impacts industries (TV) but also disrupts specific players in said industries differently – and at times disproportionately. As I was reading your thoughts, I couldn’t help but wonder how far this trend will go? Will “Late Night” shows disappear altogether eventually (and only exist in the form of short skits online), or is there something that draws viewers to watch a more cohesive comedy skit at the end of the day? If the former, how can the studios capture value? I actually think this presents an interesting opportunity to capture more specific data on viewers (ie perhaps a certain subset of viewers like a certain type of skit…advertising becomes more valuable because you know exactly who likes what type of skit and who you are reaching).

    Just my thoughts. Looking forward to reading your next blog!

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