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LETTERMAN LAUGHS LAST IN LATE NIGHT MORE VIEWERS TUNING IN TO DAYPART

By Published on .

While David Letterman celebrates his first year on CBS next week with birthday cake, the media industry is dining on crow.

Flashback to August 1993: Mr. Letterman, formerly of NBC's "Late Night With David Letterman," was preparing for the Aug. 30 premiere of "Late Show With David Letterman."

CBS had only cleared the program for the 11:30 p.m. ET to 12:30 a.m. time slot on 67% of itsstations, and the conventional wisdom was that the clown prince of late night would never be able to usurp NBC's seemingly invincible "Tonight Show."

"They were right in predicting doom. I was predicting doom," said Peter Lassally, "Late Show's" co-executive producer. "... No one was more surprised than we were."

"Late Show" has ruled late night, winning its rookie season with a 5.7 rating, according to Nielsen Media Research. Clearance will hit 90% on Aug. 29. "The Tonight Show" finished the six months ended June 21 with a 4.3 rating, down from 4.6 a year earlier, while ABC's "Nightline" had a 5.1, compared with 5.2.

Fueling "Late Show's" rise was its ability to steal away young viewers-it killed Paramount Communication's "Arsenio Hall Show"-and to bring new viewers to the daypart. The '93-94 season saw households using television in the late-night daypart increase to 34%, up from 32.7%.

"No one in their right mind could have predicted `Late Show's' dominance," said Frank Campisi, VP-research at SFM Media, New York. "We predicted that `Arsenio' would die, [`Tonight's' Jay] Leno would get hurt, `Nightline' would remain stable, and that Fox `Chevy Chase' thing would go away. But we didn't see `Letterman' doing this well. Nobody did."

CBS also hedged its bets. During the '93-94 upfront, 30-second spots on "Late Show" went for $30,000. In the '94-95 upfront, spots sold at $45,000, with scatter market time priced up to $60,000.

"Clearly, CBS delivered beyond what the original expectations were, and now the cost of business with CBS has gone up," said Tony Ponturo, VP-corporate media at Anheuser-Busch, "Late Show's" biggest advertiser.

The stunning rise of "Late Show" prompted media buyers to predict gloom-and-doom for "Tonight." But the program is alive and kicking, and media buyers predict "Late Show's" ratings gains and "Tonight's" losses have stabilized.

And media buyers say the added audience and the steady growth of NBC's 12:30 to 1:30 a.m. program, "Late Night With Conan O'Brien," have made late night hot.

Mr. Ponturo said A-B will boost ad spending by 5% on all those programs in '94-95.

But advertisers and media buyers are uncertain how many more programs the daypart can handle.

This fall will see several syndicated newcomers, like Paramount's "Jon Stewart Show" and a sketch comedy program called "The News, from Columbia Pictures Television. And then there's Tom Snyder, the late-night veteran who moves from CNBC to CBS in December to host a talk show following the "Late Show."

Spots on the hourlong program are said to be initially priced at $12,500, which means CBS' 11:30 p.m. to 1:30 a.m revenue could reach $200 million by the end of the '94-95 season, challenging NBC for the top spot in late-night market share.

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