Colbert canceled, Ellison's honeymoon and a new no. 1

Good evening from New York City. I just got back from watching The Hidden Fortress at the Film Forum and am headed out for some Spanish food.

Considering the news that Congress is cutting funding for public broadcasters, it feels like a good time to note that National Public Radio Chief Executive Officer Katherine Maher has joined the lineup for Screentime.

If you have any questions, tips or story ideas, you can reach me at [email protected].

Five things you need to know

Apple's Severance earned the most Emmy nominations of any TV show, while HBO had the most of any network.
Major podcasters who backed Donald Trump in 2024 are featuring Democrats and questioning the president.
Movie theaters have discussed creating a competitor to IMAX.
Kelcee Griffis explains how US budget cuts will impact more than 1,000 public TV and radio stations.
One of South Korea's largest video-game companies is at war with some former employees, and Jason Schreier is owning the story.

The end of late-night TV — and the start of the Ellison era

David Ellison is confident his deal for Paramount will close in the next few weeks. That's what he told his fellow media moguls at the Allen & Co. conference in Sun Valley earlier this month, and what he's told friends and associates in the entertainment business.

The last major hurdle is approval by the Federal Communications Commission. Ellison met with FCC Chairman Brendan Carr on Tuesday to sell him on the "significant public interest benefits" of merging Skydance and Paramount. Carr has expressed concerns about diversity and inclusion policies at several companies, including Paramount, while President Trump has accused Paramount's CBS of biased journalism.

So when CBS announced it was canceling the late-night show hosted by Stephen Colbert, a vocal Trump critic, prominent entertainers, journalists and a prominent Hollywood union were quick to suspect Paramount's motives. Colbert had just accused his employer of bribing the president.

CBS anticipated this reaction and said in its initial announcement that the decision to cancel Colbert's show was purely financial and had nothing to do with politics. Why else would the company allow Colbert to remain on the air for another 10 months, lampooning Trump, Ellison and Paramount Chair Shari Redstone?

A lot of partners and rivals are still skeptical. CBS recently settled a lawsuit brought by Trump that most legal experts considered without merit. If the decision were just about finances, couldn't the network have cut costs to keep the show on the air? The Late Show has a staff of 200 people and a host making $20 million a year.

A dying breed

CBS is telling the truth when it says that the show is a financial albatross. Late-night talk shows are dying and have been for a long time.

The Late Show attracted more than 8 million viewers to its first episode with Colbert as host in 2015. It averaged more than 3 million viewers during the 2016-2017 season. It's lost about a third of its audience since then.

The show, which costs more than $100 million a year to produce, suffered a steep drop in advertising sales during 2021 and 2022 and has never recovered. Though Colbert's show is the most-watched of the three major late-night shows, it attracts less advertising, according to iSpot TV. Brands have spent about $32 million with Colbert so far this year, compared with more than $50 million for each of the Jimmys (Kimmel and Fallon).

Colbert's show is on pace to lose more than $40 million this year and an additional $50 million next year. All of the late-night shows now attract most of their viewers via clips on YouTube, Instagram and TikTok – an audience that pays them pennies on the dollar.

Netflix, which has replaced so much of traditional TV, has never cracked the topical talk show. People don't watch them weeks or months after they air, which means these shows have almost no value in an on-demand world.

Nor is there a long list of people who want to host these shows. Major comedians can now make more money – and reach more people – by touring and filming stand-up specials.

So, while Colbert is the first to go, he won't be the last. Kimmel is going to be the last host of ABC's late-night show and the same goes for Seth Meyers and NBC's Late Night. The big question is whether NBC will try to find a successor for Fallon at the The Tonight Show, which has been on the air for more than 70 years.

The Ellison era

Hollywood initially greeted Ellison, son of technology billionaire Larry Ellison, as something of a savior. He will provide much-needed financial stability and support for a dying media company.

Ellison didn't know about the Colbert decision until the day it was announced. But the end of The Late Show is a sign of what's to come in the next era of Paramount.

Ellison is going to need to make a lot of tough choices to fix a damaged asset. He's going to fire people and cut back on programming at certain networks. He may sell some linear networks, if he can find the right buyer. He wants to overhaul the Paramount+ streaming service.

Much as Trump's long review of AT&T's deal for Time Warner crippled HBO in its efforts to compete in streaming, the drawn-out review of Ellison's deal for Paramount has delayed his plans. It's also resulted in a rift between Ellison and the creators of South Park, one of Paramount's biggest shows.

Ellison is on the verge of making peace with the South Park team. A deal with the FCC can't come soon enough.

The best of Screentime (and other stuff)

The biggest album of the year

Last week, we offered a breakdown of the year in TV and movies so far. This week, let's look at music, courtesy of market researcher Luminate.

The best-selling album of the year is Morgan Wallen's TKTK, and it's not even close. The country star has sold the equivalent of 2.6 million albums in the US. SZA's SOS, which came out in 2022, is second at about 1.7 million.

The second best-selling album released this year is the new Bad Bunny, which might take the crown if we had a global figure.

We do have global figures for songs, and the top song of the year is Die With a Smile by Lady Gaga and Bruno Mars. It's the one positive to come out of the Joker sequel.

A few other takeaways...

Mars doesn't miss. He has the top two songs this year thanks to his collaboration with Rosé. Meanwhile his 2010 hit Just the Way You Are is leading a resurgence in recession pop. Listeners are flocking to songs released between 2007 and 2012.
The top music documentary of the year is…Becoming Led Zeppelin. The film exploring the formation of the British rock quartet has been viewed nearly three times more than any other music doc in the US this year.
India is the second-biggest market for music consumption after the US. It narrowly edged out Mexico. Mind you, this is based on streaming consumption. India is a much larger country than the US and its people likely listen to more music. We just don't have the data to prove it.

Netflix is doing just fine

Netflix Inc. reported financial results for its second quarter that eclipsed investor expectations based on every metric. It also raised its forecast for sales and earnings this year.

This is the second quarter since Netflix stopped reporting subscriber numbers — and the second time in a row it delivered on conventional financial metrics. And yet, shares of the company slipped more than 5% on Friday.

My colleague Subrat Panaik all but predicted this. The shares had climbed more than 40% this year before the report and had doubled over the past year. Even with the dip, Netflix is valued at more than $500 billion. That is a staggering number.

Expectations for Netflix are very high, and when Netflix delivers solid — but not spectacular — results, the stock goes down.

There is also concern about the service's share of TV time. It's stopped growing in the US. Netflix commanded 8.3% of all TV viewing in June. That number was 8.4% last June. Management says engagement will spike in the second half of the year thanks to new installments of Stranger Things and Wednesday.

Deals, deals, deals

Substack raised $100 million at a valuation of more than $1 billion.
Comcast is raising the price of Peacock. The streaming service looks expensive compared with Hulu or Netflix and affordable compared with sports services.
Dr. Phil is starting a new company after his previous one filed for bankruptcy.
Roblox is adding new safety measures to better protect kids.
The billionaire music mogul behind BTS is in hot water with investigators over his company's IPO.

Weekly playlist

Two very exciting new albums dropped last week. The first was from Clipse, which we covered a week ago. The second was Moisturizer, the sophomore album from British rock band Wet Leg.