The rise and fall of late night TV (what really killed It)
In this video Michael Girdley examines the trajectory of American late‑night television—from its heyday as a cultural juggernaut that captured a massive, young‑adult audience and generated hundreds of millions in profit—to its present‑day decline and near‑extinction. He outlines how the legacy format relied on a high‑fixed‑cost structure (large studios, hundreds of staff, multi‑million‑dollar host contracts) and how that model was destabilized by successive technological disruptions: first the DVR, then the internet, YouTube, and social‑media clip distribution, which eroded the appointment‑viewing habit and forced networks onto low‑pay‑per‑view platforms. The video details the strategic pivot of The Late Show under Stephen Colbert toward overtly liberal politics, which temporarily boosted ratings but ultimately contributed to audience fatigue and further fragmentation. Generational shifts are highlighted, with younger viewers (18‑22) showing little interest in traditional late‑night formats, preferring on‑demand, non‑partisan content. Michael contrasts this with the lean, low‑cost production model of podcasts like Joe Rogan, illustrating the unsustainability of legacy shows whose revenues have fallen from roughly $400 million to $200 million annually while costs remain high. He concludes with business lessons about the inevitability of technological change, the need for adaptable cost structures, and the importance of aligning content with evolving consumer preferences.
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So late night TV was once a total juggernaut of American society. It defined culture. It told us who the stars were going to be. And it got basically every eyeball at night. You know, mom and dad would go to bed, lay down, and it was appointment viewing. And a Johnny Carson or a David Letterman or Jay Leno would give us a path into everything that was going on in the world and that we should know about it. These franchises of these shows, Tonight Show and The Late Show, made hundreds of millions of dollars a year in profit. And today, just fast forward a few decades later, they're on the verge of being extinct. They announced last week that one of the most popular of these late shows, the one on CBS, the one with Stephen Colbert, uh, was getting canceled entirely and they were not replacing it with a new late night TV show. Just a fascinating fall from grace in terms of this stuff. So this video is a business owner's view of what has happened to the late night TV over the decades, including the last couple, and how we could take the lessons from that and use those to be better business people and better owners of business going forward. So if you're new here, my name is Michael. I like to study business and use that as a way to understand what can be done better on a day-to-day business kind of activity. For those of us that are business owners or aspiring business owners, there's lots of lessons in the past of business and lessons, especially of failure, tend to be the most poignant. Those are the things that teach us the best lessons. So I make a lot of videos about that. If you enjoy that kind of stuff, do me a favor, subscribe, follow, interact with this video. It'll make me feel good about spending hours studying totally esoteric industries like late night TV and using that as a teaching tool. Oh, so direct call to action, like, subscribe to my newsletter, like this video, please comment. It'll, uh, help me feel better about my life. So CBS's entry into the late night game was pretty late, and for years they had struggled to try to compete against the likes of The Tonight Show, which was owned by NBC and is still owned by NBC, but it had folks like Johnny Carson, right? And I talked about him, uh, being like the godfather of late night for that many years and a total kingmaker. And so there was this whole idea when Johnny Carson basically retired that David Letterman, who had been doing the show at night later than Johnny Carson and The Tonight Show, he would step in and take over that slot from Johnny Carson. He was the heir apparent. Well, NBC had other ideas and they brought Jay Leno in to take that spot. And there's a whole bunch of videos about how that all happened and that sort of thing. But what happened with David Letterman is it presented a window for CBS to come in and step in and take that level of talent who could bring something that basically CBS was really hungry for, which was young audiences. And this is gonna be a recurring theme because advertisers love young audiences, 18 to 39, 18 to 49. They are great. They're the people that are spending money and people in their lives who are in the forties, they're the biggest spenders because they have house payments, kids in college, parents, young kids, car payments. I'm here on vacation and the family we're staying with has not one, not two, not three, but four cars for a five-person family so that every kid who's a teenager can make it to his job, to school, and the parents can both make it to work. So just an insane level of consumption happens amongst people in their forties. So advertisers absolutely love them. They want them to be part of their, like, demographic. And David Letterman brought that when he went to CBS. He was somebody that had been there late at night and brought these young people over. I remember being a kid at that time and in my teens, and I was super excited because David was one of us. He felt like he was a former weatherman. Man from the Midwest. He felt like he was hip and cool. And so people loved it. And in fact, David brought over his first premiere at CBS with something like 25 million viewers. To put that in perspective, that's basically like 1 out of every 5 adults in the United States stayed up to watch his first show. And most of them stayed. He would have 7 to 8 million viewers per season, and they were paying him and Jay Leno, you know, tens of millions of dollars. There's reports that they were making $30, $40, $50 million, depending on who you believe and all that kind of stuff. And to put that in perspective, that's 1990s dollars. It's totally different than today when, you know, a super high-paid person like LeBron James or whatever makes $60 million. I would much rather have the $30 million in 1990 'cause that was pre-inflation. That's probably like making $100 million these days. Just an absolute shit ton of money. And so David delivered to CBS for The Late Show exactly what they wanted. They were competitive. This young demographic came over and things went just super well. The shows continued going on by many measures during their peak leading into the 2000s. Shows like The Tonight Show, And The Late Show with David Letterman, some of these shows would make $100 million a year plus in profits for these networks, CBS, NBC, ABC, stuff like that. And ABC never really played, never really got there, but these were massively profitable things. And so they were crown jewels for these individual networks. And so they invested a ton in these things. And if you look at the format, this is kind of the first turning point for leading into where we are today, which is the format of these late, late shows and the nighttime TV is something very very high fixed cost, meaning there's hundreds of people that work in them. In the case of Stephen Colbert's show, he has hundreds of people and writers and stages, and he's in the Ed Sullivan Theater. It's in Midtown Manhattan. Just an incredible amount of expense just to run one of these things. Not to mention, I, you know, depending on who you believe with the different articles, Stephen's paid $20-something million a year. So it is a huge level of fixed cost just to put one of these things on. And I haven't even talked about ad salespeople and infrastructure and the IT folks and the camera operators. Big-time dollars all being spent to put one of these shows on. And as you understand, in most of the stories I talk about on this channel, just the moment when things like start to feel like they can't go wrong, like they're going to go on forever, that seems to be always the moment that things change for a business or an industry. And in this case, you started to see chinks in the armor and started to see, you know, softness happening. And one of the first things that came along was an introduction of technology. The DVR era came in. And if you're not familiar with DVRs, probably because you're not old, but basically a DVR was this device that would attach to your TV and it recorded TV for you. And basically you could go back and watch it later. You could skip commercials. Well, obviously, if you as a business like these late shows were built on appointment television, mom and dad had 3 channels. There was nothing else to watch. The kids were in bed. They watched the local news and then they watched the late show afterwards. And Johnny Carson would put them to bed. It had to be appointment television. And what the DVRs did is started to change it to where no longer did I have to be there in order to see the thing live, to be able to talk with everybody at the office the next day about what's going on. My DVR recorded record for me, and the next morning I could go in and say, okay, cool, like, I'll watch the 5 minutes that matter, skip all the commercials, and I'll be all caught up and I'll get a good night's sleep. And so one of the things I talk about on this channel a lot is this idea that often what creates your business is what eventually ends up killing it. And in the case of late night television, what created it was broadcast television, i.e., technology where people could have moving pictures with sound beamed in their homes. Well, technology doesn't stand still. It keeps moving. And in the case of the late shows, But what ended up happening was technology kept moving and the internet came along. And on top of the internet, we built things like social media, Facebook, YouTube, and suddenly you had a situation where I didn't even need a DVR anymore as a consumer. What I could do is, is I could watch one of these late shows the next day on my way to work or while I'm eating my cereal in the morning. I didn't even need to tune in, didn't even record 'em 'cause I'd pull 'em up on my phone or on my computer and I would watch what was going on. I'd take the best 5 minutes from the show and it would be on YouTube already and I would go, you know, just watch 'em that way. And so by the early 2010s, the idea of this appointment television where people would watch it or even record it on their DVR. I haven't seen a DVR in years, by the way. It's, I think the last one I saw was 15 years ago. But the idea of this appointment television was totally gone 'cause the internet had totally killed it. Telecommunications had created late night and telecommunications were now coming to kill it. And so you had this situation where by then people were starting to see this from an advertiser standpoint and the network standpoint. So the obvious thing that the network started to do was to take the clips and take the best of their shows and put them on platforms like YouTube. Well, there's a problem with doing that. So in aggregate, about $400 million a year historically has been coming in, uh, in revenue across all these late shows and all these, all these shows in the evening. But that started to go down over time 'cause viewership started to go down, but also because the networks and folks started to realize they weren't gonna reach their customers via broadcast TV anymore. They weren't gonna reach them the normal ways, so they had to go put them where they were, which was on clips and on streaming services. And there's a problem with that, which is you could put 'em on YouTube where everybody's watching watching video these days and where there's a monetization model, they'll pay you as an advertiser. The problem is, is that YouTube pays you about 10 cents on the dollar as a network of what you get per eyeball versus what you get if you're selling ads to Procter Gamble or Tide or somebody like that. Or one of the drug companies for running an ad inside of your show natively. So suddenly you're seeing this just massive challenge because of the streaming services and because of YouTube and these platforms and the internet making it to where the business model is just totally challenged for these late-night shows. So Stephen Colbert came in just really into the scene at a time that I feel bad for him. He came in kind of at the tail end of stuff. And there's this great scene from The Sopranos that it reminds me of where Tony Soprano's talking to his therapist. This is probably the most boomer part of this video, by the way. I'm totally sorry. He's in the mafia, and he comes into the therapist, and he gives this speech where he just says, you know, he feels like he's entering the tail end of an industry. He feels like the great times have already been happening, and he's in the twilight of this industry. And the great stuff is over, and he's just, you know, here amongst the scraps picking up the pieces. And I think that's exactly where Stephen Colbert entered this whole thing. And he had come from Comedy Central. He was part of a spinoff of a show called The Daily Show with Jon Stewart. And the idea was that somebody like Stephen Colbert could come to CBS and he could save the franchise post the retirement of David Letterman. And Stephen Colbert is super talented and he could bring young people. There were a lot of young people, including me when I was younger, that liked Jon Stewart and his spinoffs and stuff like that. And he would bring those kind people over to CBS. But there was a problem with Colbert, which was he had mostly gotten really big playing a parody character on The Daily Show, and then had his own show where he's like a parody of an arch-conservative type person. So he's really actually a liberal, very liberal kind of presenter, but in reality he was doing it under the guise of being a parody character. And it totally worked. It was totally hilarious. I loved it. Other people loved it, and it was just really good how the whole shtick worked. But when he came over to CBS with the idea of his own late show, he started to do a version of Johnny Carson and David Letterman, which is one of the interesting things with Johnny Carson and David Letterman. They were apolitical. Like, even to this day, Johnny Carson's been dead forever. I have no idea what his political stance was. He was not a political character. And that was a smart thing by late night at the time, which is we're gonna be a big tent. We're gonna have everybody in there. And Colbert came into the late night scene with the idea of being an apolitical guy. He was just gonna run it straight. And that was unfortunately totally fell flat on its face. The ideas that had worked for him were, is this, you know, parody character that didn't work in the case of late night. And secondarily, like there was no attitude at all to the show. It, it just didn't work whatsoever. And so for the first couple years, Colbert was actually quite the failure. It wasn't really working out. Ratings were down, they were not doing well. And then something happened for Colbert, which was a total godsend. Happened. And that was the election of President Donald Trump the first time. And basically Colbert people were backed into a corner at this point. They could either choose to keep doing what they were doing, which was not working, which is trying to do this middle of the road, Johnny Carson style stuff in a very crowded market, which I hadn't mentioned before. The entire market for late night had gotten super crowded by this point. You had Seth Meyers, Jimmy Fallon. Humorously enough, I was watching a thing this morning where they did a video where a bunch of all the other late night co-hosts got together to wish a goodbye to Stephen Colbert and show solidarity, 'cause you know, he's been, they're canceling his show. And I didn't recognize any of these guys. Like I didn't, I didn't know who they were. Like that shows you how irrelevant in this year of 2025 late night TV has become. But anyway, so even as late as 2015, 2016, it's a sea of MeToo stuff, right? It's just skits, the same stars that nobody cares about, and a few music acts that maybe you'll watch that on YouTube the next day. And monologues that are just kind of boring. So backed into a corner, The Late Show did what I think was something pretty smart, which was they went totally political. It was just, they were gonna be part of Team Blue. They were gonna be a democratic, liberal, progressive, big city approach to stuff. And they just went all in on that. And it totally worked. Like it propelled the entire franchise, uh, into first place. He started to average 3 million viewers a night. And just to put this in perspective, remember like the first night of David Letterman got 28 million with a population that was a lot smaller in the '90s. He had 7 or 8 million people a night. Stephen Colbert, with a population that had doubled basically in that over the last 30 years, was barely cracking 3 million, and he was killing it. Just kind of a crazy sign of the demise of the late night genre. But there's a problem with this kind of push to the left and Team Blue, which was that you have a handful of hosts all carving up the same liberal-focused, left-leaning type stuff. And like Seth Meyers does it, Jimmy Fallon I think is implicitly that way, you know, it's just how it is. And then on the right, you know, Fox has created their own kind of version of this. There's a show called Gutfeld or I don't watch any of this stuff. Shows you how irrelevant it is to me. But basically they're on the right. And then you start to have this situation where on Colbert, you know, every night it's, hey, left-leaning, bad on Trump, all that kind of stuff. Well, that's great, except Trump's not going to be president forever. And also people eventually get tired of politics. And that's one thing that you started to see happening in The Colbert Show was just like, ah, do we have to talk about politics again? It's late night and I want to escape politics. I don't want a reminder of what's going on. I don't want to be more angry before I'm trying to go to sleep. So eventually Colbert did but it started to crest and there started to be burnout on all this stuff as well. And then another problem really came in, which was the Colbert Show. The average user or the average viewer today when he came in was right around 60 years old. It's pushing closer to 70 now. Like the people that are watching late night, they're not bringing in new folks. Young people are not interested in late night shows at all. And in fact, many of them think they're kind of terrible. And so I've been spending actually, uh, on this trip a lot of time with kind of 18 to 22-year-olds. And last night I asked them, I was like, oh, what do you guys think about late night TV? And they were like, what is late night TV? I was like, okay, this is really bad for late night TV. And I explained it to 'em, explained some of the names. And one of 'em said, well, I've heard of Johnny Carson. And then I asked another one like, well, why aren't you guys interested in this? And one of 'em said, look, it's a bunch of celebrities that are just not very real and kind of fake. I'm not interested in watching that. If I wanna watch the music acts, I'll go discover 'em on Spotify or talk to my friends about it. And like, I don't want to talk about politics. I'm just not interested in any of this stuff. And to them, like, it didn't seem relevant at all. It didn't seem genuine. It didn't seem like something that's part of their life. And one of them actually said something super interesting, which was they didn't want to see stuff that was partisan. He said, why would I watch that if somebody's just going to give me one side of a view on things? I want to see both sides of it. And that precise sentiment, amongst other stuff, why a lot of why young people are not interested in The Colbert Show and a lot of these other shows, which is just like, hey, like, they're just not as much interest in having a one-sided thing anymore. And it's exactly what Colbert had become. And so you've looked at what has come to kill these franchises, which were printing a ton of money. You know, we look back on this and it's technology rising, right? You have the DVR and then the internet type stuff happening. Secondarily, you have just a level of the population just changing their views over time. And I think these are two huge lessons for, of any business, which is the only thing we know for sure is when you own a business, is, it is a dynamic world around you and you're in a situation where things are always going to change. Technology is always going to change. One of the things I say on this channel a lot is technology is going to come for every business. It's just a question of when. And in this case, technology and generational changes in terms of how young people are viewing the late night environment and the other options that they have to watch, which are much more compelling and speak much more to them. Those things together have created a situation where these late night shows, it's impossible for them to be profitable beyond a certain level because frankly, their structure and how they're built is just, the costs are incredible. You have hundreds of people working on these things, writers, distribution, salespeople, all this kind of stuff. And they're competing against somebody like Joe Rogan. And Joe Rogan will have 8 to 11 million viewers per episode. He does it with about 4 people. He has one guy, Jamie, in the office with him, himself, and a couple bookers and some promotion people. That's it. Shit. And he's just like a crazy amount of bigger audience that takes Colbert hundreds of people and hundreds of salespeople to try to put on. And eventually like that's just not sustainable anymore. And the advertisers have seen it, the revenues have gone down by most numbers. Total amount of revenue has gone from $400 million a year for late night down to $200 million a year. And when you have high fixed costs and your revenue goes down, you are in big freaking trouble. And that's how a show like Colbert can look up today and be losing $40 million a year. Just an insane amount of numbers. Ultimately, you look at it and you see the future is bleak. A lot of these shows are getting canceled left and right and they're not getting replaced. And the same thing is going on with The Colbert Show and The Late Show. And I think, man, kudos to these guys for being smart to figure it out. All right, so that's the rise and fall of late night TV. Where do you think this is all going to go? Let me know in the comments below. It'll be curious to watch, see how long some of these other guys hold on. Kimmel and those guys, I'll be surprised if they're here in a couple years. What do you think? Let me know in the comments below. See ya.
