Business Lessons of the Jay Leno Fiasco

NBC and its corporate masters (at least for now) at General Electric Co. (GE) have woken up from their state of denial and are ready to pull the plug on the disaster known as The Jay Leno Show.According to The Wall Street Journal, the Peacock network had little choice. "Facing a chorus of doubters and a brewing revolt by local television stations, NBC is re-evaluating the future of The Jay Leno Show and could return Mr. Leno to his old 11:30 p.m. perch." That is quite a change. Back in September, NBC head Jeff Zucker was optimistic about the show's strong debut, telling a Goldman Sachs conference: "The fact that it opened so well is a great sign."

%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%% Zucker could not have been more wrong. Ratings for The Jay Leno Show tumbled soon after the debut, once curiosity seekers got their fill. The new showwas as edgy as a stick of butter. The celebrity interviews were stale. The jokes were lame. Viewers had seen it all before on The Tonight Show, which Leno successfully hosted for 17 years. (The only difference I can see between Leno's old show and his new one is that he had a desk on The Tonight Show and now does not.)

Moving Leno to 10:00 p.m. from his familiar 11:30 slot was a "huge mistake," NBC executives told the Journal. Comcast Corp. (CMCSA) raised questions about NBC's relationship with Leno during talks that led to the Philadelphia-based company's offer to take control of the network's parent NBC Universal, according to the Journal. Any changes to the evening schedule are likely to be announced after the Olympics in February.

This disaster, which will cost the network tens of millions of dollars, was entirely preventable. NBC, whose glory days of the 1980s and 1990s are fading from memory, made many errors in handling Jay Leno that will be discussed in business schools for decades to come. Here are some of them, in no particular order:

  • If you try to please everybody, you wind up pleasing nobody. Zucker promised Leno's show to Conan O'Brien to keep the host of Late Night With Conan O'Brien from bolting to a competitor. NBC announced these changes in 2004, but instead of creating a smooth transition, Leno decided he was not ready to end his TV career quite yet. Pressured by costs and a desire to avoid losing its biggest star, Zucker offered Leno the 10:00 p.m. slot, instead of banking on programmers to come up with the next ER. But now, Leno is furious and his replacement, O'Brien is, according to TMZ, getting pushed out. It remains unclear where that leaves Jimmy Fallon, whose show follows O'Brien's.
  • You don't get more with less. The Jay Leno Show was dreamed up by MBAs to control costs. The problem is that these executives were painfully out of touch with the interests of the average American viewer. A cheaper show still needs to be entertaining.
  • Committee thinking can be dangerous. Bad ideas spread like wildfire unless someone has the guts to put a stop to them. Clearly, this did not happen at NBC.
  • Past performance is no indication of future results. Every fund prospectus says it and it's true for other things as well. NBC seemed to be positive that a big star such as Leno would attract viewers without realizing that a new program would have to be . . . well new.
  • If it ain't broke, don't fix it. Leno beat rival David Letterman in the ratings so often that it ceased to be newsworthy. Leno's Tonight Show even claimed victory in 2008 when his writers were on strike and Letterman's were not. Letterman's ratings have soared since O'Brien took over from Leno, even though he has dealt with his share of negative publicity. Coincidence? I think not.
In the end, The Jay Leno Show will be remembered as a triumph of form over substance. It was the day when bean-counters decided they knew how to entertain people. Leno, who has entertained tens of millions of people over his career, deserves to be treated better. It will be difficult for him to regain the ground he has lost to Letterman if he does return to television.
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