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Summary:

It’s not clear where Conan O’Brien will end up when he finally departs NBC, but some have suggested he take his act online, where a number of people already watch his antics. Revision3 even issued an open letter to the late-night talk show host, promising him […]

It’s not clear where Conan O’Brien will end up when he finally departs NBC, but some have suggested he take his act online, where a number of people already watch his antics. Revision3 even issued an open letter to the late-night talk show host, promising him the opportunity to create a brand new show through its network.

But what do web video pros think? To find out, we asked a few if moving Conan from late night to the web would make sense. Some dismissed the idea, saying that the economics wouldn’t work out and that there was no way a web show — even one with a brand like Conan O’Brien at the helm — could possibly make money. But not surprisingly, Jim Louderback, CEO of the company that wrote the open letter to Conan, sees a model where the late-night host could generate significant revenue, if not the same level of revenue, under the broadcast model.

First, let’s look at the money Conan is generating now. Based on the approximate 2 million viewers that show up to watch The Tonight Show on TV, along with the number of ads that are shown, Louderback estimates that NBC pulls in about $200 million a year from Conan’s show.

But what happens if you move Conan online? Let’s say the move cuts his audience in half, resulting in about a million people tuning in. With a couple of pre-roll or mid-roll ads and a bunch of overlays shown on YouTube model, Louderback estimates that the show could pull in around $40 million. A more conservative estimate, with Conan retaining about 500,000 viewers per episode and lower CPMS, puts revenue at between $15 million to $20 million — which definitely isn’t broadcast money, but is still good money when compared to other online productions.

“What are great numbers for an independent show creator are not great numbers for Conan,” said Mike Hudack, CEO of blip.tv. “Some of the best web shows make hundreds of thousands of dollars, but Conan makes about $1 million per episode.”

What might be a bigger problem for getting Conan — or really any network star — to take his show online is the cost of funding production. The Tonight Show employs a massive staff, which Tim Shey, co-founder and executive vice president of Next New Networks, says he’s unlikely to part with. “Conan’s got a whole band, he’s got 30 writers. I can’t wait for the first Conan to come to web television, but Conan wants to get jobs for his whole staff.” Online, Shey said, “you have to do these things lean, do them tight, and do them low-cost.”

It seems unlikely that Conan would make a move online — even if he can afford to do so, having just negotiated $40 million from NBC to leave the network, according to reports. But most believe the day of the network star moving online could come soon, since the audience is already there and the money is following fast.

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  1. Philip Hodgetts Tuesday, January 19, 2010

    Somone’s looking at the wrong metric. What NBC can pull for the Conan Show is revenue for NBC, not Conan’s show. The number that has to be compared is how much Conan (and his team) are now making producing the show (for NBC probably). That wold be the number to compare with possible online revenue.

    I’d like to see him try, just because it would be interesting!

    Philip

  2. Barrett Garese Tuesday, January 19, 2010

    If I were still an agent, I wouldn’t let him take that deal. It’s just too little right now in comparison to what he’d make somewhere else.
    Now you’re welcome to argue the intangibles, as well as things like “raising the profile” and “artistic freedom,” but this article isn’t called “Will Conan O’Brien Be More Creatively Fulfilled Online,” it’s called “How Much Money Could Conan O’Brien Make Online.”
    The simple truth is that in today’s online market, even with the money going straight into his pockets with zero overhead, he wouldn’t be making enough to keep the current show (and his current lifestyle) the way it stands today.

  3. FYI… Jay’s Tonight Show only pulled in $25 million in profits during his, um, last year hosting the show. Conan’s show was estimated to lose $3-$5 million in 2010.

  4. Have their been any rumors or anything about Conan doing an exclusive show with Hulu? Seems like that would be a huge win for the site, setting a precedent of a show bypassing networks all together. I’m sure the networks themselves wouldn’t be too happy with this, but they’re what got them into the whole mess.

    1. I’m sure they’d be more mad if they didn’t own Hulu.

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  9. I think saying that his audience would be reduced to 1 Million is just short sighted. The web is global and allows him to reach a much bigger audience than his previous US only show. Unlike many of the current web shows, Conan is a big name (especially now!) who appeals to people who would not normally go to the web to watch a show, however they would to watch a show like his.

    Also this show could then also be re-aired on regular stations around the world generating further income on top of what they earn online.

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