The economics of the Late Late Show: The perils of reinventing a €6m cash cow

“To whom it concerns, it’s The Late Late Show” are words that anyone over a certain age who grew up in Ireland will automatically hear in the smooth intones of an RTÉ announcer. But who, in 2023, does the Late Late concern?

Not Ryan Tubridy, or rather not Tubridy after May 26th, the 14-season host’s last Late Late rodeo – three more shows, and he’s out of there.

Not the non-watchers bemused by the attention bestowed on the protracted process to replace him, deeming it nothing more than media navel-gazing about a programme that in their minds died in 1999, when Gaybo left.

But the Late Late is still the concern of an audience that despite being in the throes of a long-term decline remains sizeable enough to bring in as much as €6 million a year in spot advertising, sponsorship and ancillary competition revenue.

Elon Musk finds his inner Ken and paints Twitter black for ‘X’ vision

---

Ireland is not the only place seeing a media meltdown this summer

---

Why can’t online news outlets hike their prices?

---

This, combined with the intangible brand value of the Late Late to RTÉ, makes it very much the concern of incoming director general Kevin Bakhurst, who is inheriting the leadership of the public service broadcaster at a time when its flagship entertainment show is approaching a transition fraught with risk.

For advertisers, the answer to the host quandary lies entirely in being able to predict the numbers the candidates will pull.

[ Laura Slattery: What the Late Late needs now is the total chaos of guest hosts ]

“I don’t think it would be a case of ‘we’re pulling out because it’s presenter X or presenter Y’,” says Bill Kinlay, chief executive of the advertising agency Mindshare and its WPP-owned holding company GroupM in Ireland.

“It sounds a bit Machiavellian, but clients only care about the audience. They want the eyeballs, so they want the person who is going to get the biggest audience. I think RTÉ want that as well.”

Identifying that person is one thing, sealing a deal with them is another. And as close as Patrick Kielty might be to securing the gig now, this was not the succession plan. It is unclear whether RTÉ had ever properly formed one.

“I think it is a ball dropped by RTÉ. It was obvious that at some stage Tubridy would move on or throw in the towel, and RTÉ probably should have had somebody lined up. But that’s easy for me to say,” says Kinlay.

The conundrum now facing executives is that the Late Late is agreed to need “a bit of reinventing”, as Kinlay puts it, but giving the new presenter the helping hand of a modernisation of the format – the sort that Tubridy would also have liked – will mean leaving advertisers’ money on the table.

Difficulties securing big-name guests and the feeling that a two-hour live chatshow is out of kilter with 21st century television norms mean one commonly proposed reform is a shorter runtime of about 85 minutes, with the show coming off air at 11pm.

The hefty 37-week season – a marathon compared to chat-fests such as the BBC’s The Graham Norton Show – has also heightened the sense that the Late Late requires a level of commitment that Tubridy was no longer prepared to give and was unappealing, too, to initial frontrunner Claire Byrne.

But shortening either the runtime or the season run could be costly.

“What would they put on afterwards? Would it get an audience? I’m not sure what benefit [a shorter show] could have, other than the benefit for editorial content,” says Christina Duff, managing director of Core Investment, part of marketing group Core.

[ Patrick Kielty: ‘Trailblazer’ with ‘gallows humour’ is frontrunner for The Late Late Show ]

If the Late Late is to come off air at 11pm next season, RTÉ will need to inform advertisers sooner rather than later.

“In terms of planning, we would need to know who or what is taking the slot by midsummer . . . the start of July at the latest,” says Duff, noting how TV advertisers begin months of “condensed spend” in the autumn.

Duff estimates that spot advertising alone brings in €3.5 million to €4.7 million a year, excluding the Toy Show, which would add about €1 million.

Kinlay, meanwhile, estimates that the Late Late is “worth €4.5 million to €6 million a year to RTÉ”, with his figure also including a sponsorship deal agreed annually with Renault valued at about €700,000 to €800,000 plus ancillary revenue from promotions and competitions. He includes the Toy Show in his total, saying it could account for a “very significant” €1.5 million.

There is a range to both estimates because of the complex ways in which television advertising is bought and sold: typically, advertisers buy exposure to a particular category or subcategory of audience, rather than a specific show.

The Toy Show is treated similarly to high-profile sport fixtures, however, with special packages sold to advertisers who want the highest-profile slots, and the 2022 offer indicates the advertiser occupying the first 30-second ad in the first break paid €86,000 for the pleasure as part of RTÉ's “platinum package”.

Otherwise, advertisers might pay about €40,000 for a 30-second ad during the Toy Show and perhaps €7,500-€11,000 for one that runs during a normal Late Late, Duff says.

Direct revenue is only one part of the picture: the Late Late, as a schedule linchpin, has “a broader value to RTÉ, that is hard to get a total sense of”, but could be worth as much as €20 million, according to Willie O’Reilly, who was RTÉ's group commercial director for six years to the end of 2017.

“The commerciality of these things is always a little bit difficult to discern,” he says – a situation that can be advantageous to skilled talent agents who enter pay negotiations armed with facts and figures.

While RTÉ doesn’t release how much it makes in revenue from “programme interaction competitions” – essentially, from premium rate phone lines – this money declined 20 per cent in 2021, partly due to editorial decisions not to run competitions on some Late Lates, replacing them instead with charity fundraising.

That Late Late viewers donated €6.8 million to causes including suicide prevention, cancer research and homelessness in Covid-stricken 2021, plus another €6.6 million in that year’s Toy Show Appeal, is evidence of how much the show remains a focal point in Irish society, with its popularity, or otherwise, a microcosm of RTÉ's status in cultural life.

“The significance of the show goes beyond the financial for me,” agrees Kinlay, citing how much of an audience magnet it became at the pandemic’s disconcerting outset.

But a Covid bump in the Late Late’s audience – the most-watched edition of 2020, presented by stand-in Miriam O’Callaghan, drew 876,000 viewers – was ultimately only a temporary respite from a trend that will worry RTÉ.

In the season to date (excluding the Toy Show), the average Late Late viewership is 450,000, according to Duff, with the weekly audience varying hugely from 340,000 to 550,000, depending on the guests – “arguably, the most important factor for viewing figures” – and the time of year.

Consider that back in October 2011 an audience of 517,000 was seen as a ratings “slump”, despite the edition in question having the excuse of clashing with a critical Republic of Ireland qualifier, and it’s easy to see how the show’s recent dips below the 400,000 viewer mark might have contributed to Tubridy’s decision to quit.

And yet the Late Late is not an anomaly. Core’s analysis shows, too, that it has actually outperformed with some key audiences. While the show’s 25- to 44 year-old viewership dropped 30 per cent between 2008 – the year before Tubridy took over – and 2022, this is better than the 45 per cent plummet in RTÉ's overall viewership among this group.

So, the Late Late might not be quite as shiny a jewel as it was in the past, but under certain lights, it has faded less than other baubles that once glistened from the schedules of linear television almost by default.

Duff also points out that its share of the total audience watching television on a Friday night is about 40 per cent, making it “an important anchor programme” on the schedule: “Media buyers will fight to ensure they have their clients placed within this weekly two-hour slot,” she says.

[ How the Late Late Show opened the door to sex, divorce, contraception and feminism ]

The thornier uncertainty is the long-term outlook for both television advertising and RTÉ as a whole, with much of the tension here springing from broadcasters’ failure to date to adequately replace lost income from linear channels with digital revenues. Is the future of the Late Late in particular, and linear television in general, simply a case of managing decline?

“Everyone is putting off saying that,” says Kinlay. GroupM does econometric studies with its larger clients and what typically comes out of them is that “TV still works”, he adds. “I’m old, but my belief is that television still has a role to play, and still has a potent role to play.”

The Late Late encapsulates “all the problems of legacy media”, suggests O’Reilly. “Eventually, the cash starts coming down and the question is, when do you kill the golden goose?”

With the Late Late delivering an unignorable chunk of RTÉ's group-wide advertising revenue of €110 million (as of 2021) – and being less pricey than sport and drama while it’s doing this – the answer is clearly “not yet”.

But anyone signing up to be its host would be foolish to ignore the market backdrop and how it might colour the narrative for how well he or she is connecting with audiences.

Positivity surrounds the possibility of Kielty being the man, with the Co Down comedian thought to have the requisite intelligence and wit for the Late Late, as well as the likeability to transcend any anti-Northerner prejudice. Cat Deeley, his talented and glamorous presenter wife, is regarded as an asset as far as his profile his concerned – her video post on their joint outing to last Sunday’s IFTAs being one example of how.

But there is regret, too, that Byrne has demurred, and a sense that RTÉ was complacently assuming that the Late Late would still automatically be the pinnacle of any Irish broadcaster’s career.

While both RTÉ and the presenter insist no “meaningful discussions” took place, Byrne had been dubbed the “shoo-in” for a reason. Kinlay is not the only person to use the phrase “ticked all the boxes” in relation to her candidacy.

“If you had asked me three months ago, I probably would have said Claire Byrne,” says Duff, when asked who her preferred successor would be.

RTÉ bosses, the new host and the production team behind the show will all have the comfort of knowing audience curiosity should guarantee a high viewership for the chosen one’s first episode, at least.

“We expect there will be an uplift for the first couple of shows,” says Duff.

But whether he or she will be able to secure anything close to the 927,000 viewers that Tubridy attracted for his first show in 2009, or the 15 per cent increase in viewership he drew that autumn compared to Pat Kenny’s last season, is more doubtful.

It seems unlikely, too, that anyone else will be able to match Tubridy’s phenomenal Toy Show performance, which in its peak years drew more than 1.7 million viewers. The disaster of its musical theatre spin-off aside, this has been an extraordinary success for RTÉ to which much of the credit must go to the departing host.

Extending his replacement’s honeymoon for as long as possible will be the aim of the game for RTÉ come September. For now, it must concentrate on confirming the name.

“They do tend to be able to pull it out of the bag,” says Kinlay, “even if they do get there in a cack-handed way”.