Here’s a take I hadn’t considered on NBC’s Jay Leno/Conan O’Brien debacle: Good news for Time Warner!
So says JP Morgan’s (JPM) Imran Khan. He predicts that Jeff Zucker’s screwup is good news for Jeff Bewkes, since Time Warner makes a lot of “scripted programming”, and that’s what NBC will need to replace Leno at 10pm.
The whole point of moving to Leno to 10pm, recall, was to save money on “scripted programming” — what you and I call “shows that aren’t reality shows”.
But it’s not as if NBC stopped running scripted shows altogether — at max, it’s going to need an additional 5 hours a week. Khan says this will represent “incremental spending” for Time Warner (TWX), but it’s not as if NBC’s pressure to save on programming costs is going to go away. And even if the network buys all of 5 of its hours from Time Warner, it’s hard to see how that does much for a company that generated revenues of $6.3 billion last quarter (not counting AOL).
Khan also thinks that the same logic means bad news for Disney (DIS) and News Corp.’s Fox (NWS), because increased demand for non-reality shows “could result in higher talent and production costs”.
Again, that also seems like a stretch: It seems like the lesson to draw from all this isn’t that expensive programming is good, but that bad programming is bad.
And as ad dollars inevitably leach out from TV to the Web, the pressure on all the networks will be to keep their eyeballs while spending less on content. The real winners will be the ones who figure out how to make good stuff, cheap.
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