Peter Kafka

Recent Posts by Peter Kafka

Is NBC’s Jay Leno Disaster Good News for Time Warner?

NUP_133173_0230Here’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 10 pm.

The whole point of moving Leno to 10 pm, 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, and at max, the network is going to need an additional five 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 five of those hours from Time Warner, it’s hard to see how that does much for a company that generated revenue of $6.3 billion last quarter (not counting AOL).

Khan also thinks the same logic means bad news for Disney (DIS) and News Corp.’s (NWS) Fox because increased demand for nonreality shows “could result in higher talent and production costs.”

Again, this 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 viewers’ eyeballs while spending less on content. The real winners will be the ones who figure out how to make good stuff cheaply.