NBC's Jay Leno Solution: Digital Anywhere Instead of Appointment TV

 |  Includes: CBS, CMCSA, GE, NWS
by: Diane Mermigas

NBC Universal’s (NYSE:GE) Jay Leno fiasco is a classic, inefficient television maneuver that its new owner, Comcast (NASDAQ:CMCSA), and digital consumers will not tolerate for long. NBC is missing the opportunity to capitalize on Leno in digital anytime rather than in appointment prime time.

Now that the lead-in ratings for NBC affiliate late local news have been destroyed and television’s late-night ecosystem have been disrupted by Leno’s short-lived move to 10 pm (eastern), the peacock network is struggling to find a way to restore economic order. Leno’s move to make way for “Tonight Show” successor Conan O’Brien has failed, in part, because it is predicated on outmoded appointment TV thinking.

The number of viewers still tuning into Leno weeknights on broadcast television has the potential to be exceeded by consumers accessing Leno 24/7 on wireless Internet connected devices - if NBC only produced and promoted his show that way. NBC could develop original online content around Leno’s wit and celebrity attraction that is better suited to digital video consumers.

In other words, there isn’t anything wrong with Jay Leno that an anytime, anywhere access strategy couldn’t fix. The real problem is NBC’s failure to take digital risks.

O’Brien joked about the matter Friday night telling his “Tonight Show” audience, “We have a great show for you…I have no idea what time it will air, but it’s gonna be a great show.” Just maybe that’s the point. Digital consumers don’t care where O’Brien or Leno are scheduled by NBC as long as they can access their programs anywhere and anyway they want.

NBC has hundreds of millions of dollars wrapped up in Leno and O’Brien, whose contracts are predicated on a dying business model of hosting talk shows at specific times in the network schedule. NBC’s inability to think outside the TV box clearly is angering Leno, alienating their fans and running the risk of losing O’Brien to rival Fox (NASDAQ:NWS). NBC’s answer to its flubbed prime time Leno experiment appears to be more of the same: move Leno back to 11:30 pm ET time slot and push O’Brien back a half hour to midnight ET to make room for both again in late-night.

It is unlikely that NBC Universal’s proposed new controlling owner, Comcast, will support these kinds of costly shenanigans, which digital consumers already have rejected. Comcast, the nation’s leading cable operator, is focused on changing the status quo to protect its competitive position with its TV Everywhere and VOD initiatives. It is likely that within the first years following completion of the merger, Comcast could convert the struggling NBC from a broadcast to a dual revenue-supported cable network and jettison the owned and affiliate TV station structure. Comcast most likely will look to new digital solutions, rather than the crumbling broadcast practices to address such problems. Comcast will co-own NBCU with General Electric oncese the deal is finalized perhaps later this year.

For now, NBC is considering whether to once again divide the spoils of late-night by moving Leno back to 11:30 pm (eastern) and pushing O’Brien back a half hour to midnight. “The Jay Leno Show” is a three (out of five star) feature on Hulu.com, the free advertising-supported online video service co-owned by NBC, Fox and ABC.

One of the most intriguing Jay Leno online videos features Leno driving his red 2010 Mercedes-Benz SLS AMG Gullwing along the 13-mile stretech of what he calls Hollywood’s hidden raceway circuit. Leno renders interesting and amusing personal reflection about cars, himself, the biz and Hollywood culture during a pre-dawn cruise down Mulholland Drive and Sunset Blvd. through Hollywood and Beverly Hills. “Jay Leno’s Garage” is a separate selection from Jay Leno Show clips on NBC.com ’s free, ad-supported web site.

The entertaining tour de force provides a valuable lesson to NBC and its broadcast network brethren. The online video market and demand for appointment TV shows should be considered the new frontier — not an afterthought — for their dying business.

As for Leno: Best to let Jay be Jay.

Disclosure: None