Losing the Colbert Rapport

The notice that Colbert will end after this season has sparked a lot of discussion in popular culture. Senators are using it as a political football. Everyone is pointing to the hard to miss criticisms of his parent company made just days before regarding a 60 minutes interview.

Most are leaving out the fact that the show was losing money. It actually didn’t have to, losing money on this show was a choice. Likewise, cutting him is going to cost them.

And while we can’t work out the math of what this decision means for currying political favor across a huge media enterprise that includes broadcast, outdoor, films, etc— nor can we calculate the kind of cost of keeping a provocateur that points the gun at the parent organization— we can at least extend some thinking about the value of this IP.

Colbert leads the Day Part, Has Social Juice.

It’s hard to believe the #1 show in the time slot couldn’t be downsized, re-tooled or re-imagined as a profit center. Not only is it #1 in the late night category, the show is the 5th best vehicle for delivering ads on the network, per iSpot. On Youtube, per Tubular, the show is often among the top 100 media properties.

As a media property goes, it’s pretty darn valuable and really hard to re-create.

Cost Cutting is Cockamamie

According to ownership, the show lost something on the order of $40mm/ year. A simple comparison shows that revenues lagged Fallen and Kimmel- despite a bigger audience, by a ballpark of $20mm YTD. If they had the same ad loads and cut promo time, it’s about… $40mm difference in a year. EG, it wouldn’t be hard to get this to break even.

It lost money because Paramount made the choice not to use Colbert purely as a vehicle to generate revenues but rather to use that ad time to drive customer acquisition in other facets of its enterprise— the streaming app, other shows on the network and sister networks— etc.

Executives know the value of Colbert’s show is a premium product that reaches lots of key demos, and they (smartly) leveraged him to offset an even pricier proposition: purchasing even more ad time on operating systems like VIZIO, Roku, LG etc.

Habit forming is an exponentially expensive business.

In an era where TV networks and streaming publishers are forced to compete for every little scrap of attention, millions of dollars are shed to get people to consume a 6 episode series— Colbert drew a decent audience four days a week, 154 episodes a year and thanks to social media and viral nature of its content, had tune-in baked in.

This attention machine racked up billions of hard to replace viewership hours. CBS doesn’t enjoy the same loyalty and viewer relationship that say FOX News did when it cut Carlson- the daily habits are not cheap or easy to create or replace.

Colbert Helps Brands Reaches the Hard to Reach

Not only does Colbert’s social appeal give CBS a broader age and demo than it’s other popular programs, it helps the matchmaking business of advertising.

In an age of subscriptions and skippable TV viewing— there are only a few precious opportunities for brands to reach the unreachable populations. Increasingly it’s with perishable content with broad appeal. NFL viewers, news viewers and talk shows tend to be the last hold outs for people like me who avoid ads at all costs.

Cancelling Colbert is Counter to the Culture

Paramount has done an incredible job over the years developing the kind of IP that bakes its way into the fabric of American identity. From morning shows to news programming, crime dramas and family comedies, to its late night offering; the media company literally helped shape the identity of society and the schedules of millions of Americans.

Paramount brands for the most part have always understood how to create a format, build a behavior and stay competitive without breaking the bank on its programming. It’s leadership, to this day, is leaned into innovation and relationship. It skipped the Upfronts for a series of more personal dinners. It is investing in better data systems and pushing currency to the next phase.

So not only does the cancellation by ownership put additional strain on a great group of TV professionals, it upends some of the prevailing logic about how the market values TV properties and could undermine the notion of viability for the format and medium of linear TV writ large.

When we do the math, it’s hard to see anything but subtraction.