Alex Reid

The recent late night television fiasco that became of NBC’s scheduling screw up has enthralled media industry insiders and TV watchers alike.

On September 27, 2004, on the 50^th anniversary of The Tonight Show, host Jay Leno announced on the show that he would be stepping down in 2009 and that Conan O’Brien would succeed him as the host of the “dynasty”.

In 2009, NBC announced it would give Leno a new one hour long show to be aired at the 10 PM timeslot, literally a prime time move. At the end of May, Leno passed the torch as promised to O’Brien.

Months after the premiere of Leno’s new show in Fall 2009, it was consistently obvious that the ratings for Leno’s show had fallen, by as much as 53% (49% in the Los Angeles market alone). This caused a considerable negative domino effect upon the affiliates’ 11 PM late-night news timeslot ratings. This in turn impacted O’Brien’s The Tonight Show as well as the show he left that followed him, now hosted by Jimmy Fallon.

In January, under considerable pressure from the local affiliates, NBC admitted defeat and announced that Leno would be given back his old timeslot at 11:35 PM but his hour long show would be reduced to 30 minutes and that O’Brien’s The Tonight Show would air at 12:05 AM. It was reported in the media that O’Brien was not consulted by the move and soon issued a press release stating that he would not move and that this was damaging the integrity of the show itself.

While O’Brien made a correct assertion that a show aired at 12:05 AM technically would not be The Tonight Show (competing talk show host David Letterman suggested it would be called “The Tomorrow Show”), O’Brien’s contract with NBC did stipulate that his show could be aired at 12:05 AM without penalty, presumably to allow overruns for sports events.

Legally speaking, at the time, Conan had two options: do the show or quit.

Instead he stayed quiet – a smart strategy no doubt advised by his super agent Ari Emmanuel – on the issue. Sure, he made jokes about it. He had to, that’s his job. But outside the show and in public, he simply said he wouldn’t budge. This forced all eyes to be cast upon NBC for a response. Another thing that helped was the sheer velocity of public support for the underdog, fuelled by the masses online. Facebook groups, physical rallies and other online campaigns called for “Coco” to keep his show with the original timeslot.

Days later NBC Universal chief Jeff Zucker threatened to simply take Conan off TV for not only the two and half years left on his contract, but for another year, citing a non-compete clause which was not accurately true.

After two weeks of punishing jokes from everyone in late night TV about NBC, the network agreed to buy out O’Brien from his contract by paying him $33 million (what he would have earned had he stayed) and $12 million to go to his staff (approximately 200 people) some of whom had re-located their families for the show. Sidekick Andy Richter and bandleader Max Weinberg still have to negotiate their own settlements.

The terms of the settlement also bench O’Brien from television until September 1st, 2010. He also cannot make disparaging comments about NBC, appear on other talk shows or do interviews until September. And of course NBC owns all Intellectual Property of the comedy bits that O’Brien performed as part of the show.

Where O’Brien will go is anyone’s guess right now: HBO, Fox, TBS or FX?

Kevin Reilly, the President of Entertainment for Fox, was one of the first to enter the fray last week, suggesting that O’Brien would be “a perfect match” for Fox as they had no late night show offering. It should be noted that Reilly was also “shoved out” of NBC in 2007, after having served the same role within NBC.

Ultimately, however, Fox would have to win over the local affiliates if they want O’Brien to take on Leno and Letterman. As it is, most of them are running reruns that make a substantial amount of money for those stations.

If you’re interested in corporate treachery and the behind-the-scenes story that happened recently with Leno and O’Brien, I highly recommend watching The Late Shift, which chronicles the previous conflict involving The Tonight Show (the one Leno said he wanted to avoid a repeat of). In both cases, then and now, NBC wanted to keep both hosts but ultimately favoured Leno as the breadwinner.

What I found interesting in the movie wasn’t that Leno reportedly hid in a closet to overhear an executive conference call that may or may not have cemented his job; it was the legal tactics involved. Treat Williams wonderfully plays Hollywood agent Michael Ovitz whom Letterman had gone to after finding out that he was being passed over for Leno.

Letterman has a "Godfather" moment with Mike Ovitz in The Late Shift

Letterman was also afflicted with a variety of clauses in favour of NBC (most likely because he didn’t have an agent representing him and simply wanted the job as host in 1982). One of the terms was that Letterman could not approach any other network for 18 months. So Ovitz simply put the word out to have the networks approach him. Letterman couldn’t reach out but he could listen.

Another clause was that NBC had the right to winningly match any offer another network made, so CBS offered a $15 million penalty if they could not give him the a timeslot before midnight, something that NBC obviously couldn’t do without simply giving Letterman The Tonight Show.

Ovitz was indeed on top of the game.

But I think what we witnessed here was more than legal and media wrangling, it was (yet again) the awesome power of the Internet. Sure, other talk show hosts made jokes but only because the TV audience expected it, and journalists wrote article after article every hour on the hour, but again because readers expected it.

People massed together for the underdog, just as they would have for Letterman if the social technology had existed then. And while this may seem like a great embarrassment for NBC, just as it seemed in the 1990s, all this attention may just have more people tuning in. To NBC’s credit, they’ve openly made available most of the parting shots by O’Brien on their web site.

As it is said: all publicity is good publicity, even bad publicity.

In a troubled industry, Southwest Airlines is known for “mixing” it up.

Oprah will begin to Tweet tomorrow (Friday) as she talks to actor Ashton Kutcher about his race with CNN to become the first twitter user to pass one million followers. Of course as this article points out Oprah may surpass them both soon.

She currently has 52,000 followers at 10pm CST. She will probably have half a million in four days.

I’m happy that Apple announced they are opening an Apple Store in Polo Park in October 2009, not just because I’m a recent Apple convert, but because Apple Stores are attractive.

No word on how this will affect neighbouring Apple retailers (Advance Electronics, Best Buy & Future Shop).

Martin Cash of The Winnipeg Free Press reports that the two largest taxicab companies in Winnipeg (owning 91% of the 410 cabs on the streets) are applying for more licenses despite opposing over 800 licenses of the same license applications made by other much smaller and start-up cab companies last summer (many cab companies only have one car). The largest application was made by a newly formed co-operative of disgruntled drivers for 150 licenses.

Cash also reported on this frustration several weeks ago when a disgruntled cab driver who was applying for 50 licenses called the two companies “a cartel”. Not helping so much with the label, the biggest opponent against his applications was Sidney Soronow – lawyer for both Unicity Taxi and Duffy’s Taxi – who argued that more cabs would “destroy the industry” and that “the health of the industry is at stake.”

Yet here they are asking for more licenses.

The belief of Unicity Taxi and Duffy’s Taxi is that if more licenses are going to be granted by the Taxicab Board (a provincial regulator) they should go to them. It’s a bit arrogant and certainly not in the best interests of a free market to continue to allow two companies (out of dozen companies) to control over 90% of the cabs on the road. And to add insult to injury (to the smaller companies) is that there is a rumour that Unicity Taxi and Duffy’s Taxi may shelve any new licenses.

Taxicab licenses in Winnipeg are much coveted at an average re-sale price of $220,000, the highest going for $285,000. [source]

The smaller cab companies claim there is more demand for taxis, while Unicity Taxi and Duffy’s Taxi say December is their busiest month (this doesn’t mean other months aren’t busy), so really the key to the supply/demand argument here is demand. CBC reported last year that Winnipeg has a low availability of taxis per capita in comparison to other Canadian cites.

If consumers (taxi customers) had a way to voice their complaints, the primary complain being that they are waiting too long for cabs or that they are generally unhappy with the service already offered by the two leading taxi companies, then the Taxicab Board might be impressed to allow more competition into the market.