Will Jon Stewart go over-the-top?

Like many of you I was a bit surprised by the announcement today that Jon Stewart is leaving “The Daily Show”. A show that he took over in 1999 and turned into an icon of political and pop culture satire. A show that I have enjoyed for years. But I’m almost not terribly surprised and here’s why and what I think he might do next.

Mr. Stewart has been on the show for a long, long time. A grind that I’m sure loses it’s pleasure pretty often. I get antsy after 15 minutes at Target. Certainly producing and anchoring “The Daily Show” is more fun than shopping for milk, curtain rods, and legos but still.

Mr. Stewart recently moved into filmmaking by writing and directing Rosewater, a 2014 film about a prisoner in Iran. Haven’t seen it but I heard it’s good. More importantly he apparently really enjoyed making it.

He also authors books, hosts events. and is a frequent guest of other television shows. He has a knack for developing talent like Stephen Colbert, John Oliver, Ed Helms, and Steve Carell. For “The Colbert Report”, Mr. Stewart was executive producer, thus allowing him to expand his oversight into additional content and drive additional wealth from the stars he raised. Indeed, Mr. Stewart is a pop icon himself with legions of fans across the globe.

So what is a talent of his caliber going to do next? He hasn’t said anything yet but might soon. Or he might vanish into a small cabin in the woods for years but I’m skeptical of that. He has choice and I bet Vegas would say that the odds of him doing interesting new things after leaving the show are pretty high.

In an entertainment world in constant evolvement we are seeing everything from fundamental narrative changes in how stories are told, shifts from passive to interactive entertainment, the influence of social media networks, and the rise of new digital experiences and gadgets. One additional trend is OTT or over-the-top video services. These are services that by-pass the standard television ecosystem and monetize video directly with consumers via the internet.

There are many forms of OTT that I categorize into the following:

  • OTT as a distributor — Best example is Netflix who mainly distributes licensed content but who also has been moving into the next category as well. Usually subscription based but also ad-suppored or free in some cases. Amazon and Hulu belong here too.
  • OTT as the new maker — Original, usually low-cost, programming distributed primarily via web and apps and either monetized by advertising, subscriptions, or both. MCNs like Fullscreen and Maker Studios are examples. Some new makers like Vice also transition into distributing via traditional television.
  • OTT as the broadcaster — CBS went over-the-top a few months ago. HBO announced plans to do so this spring. These are television broadcasters going direct. I’ll also include sports leagues in this who for years have had content produced for television sold over-the-top to consumers.
  • OTT as the brand extension — These are brands like Red Bull who produce original video material and distribute it directly to viewers via apps and aggregation services as a way of increasing brand recognition and engagement.

There is also one other. I call it “OTT as the talent”. By this I mean traditional media talent moving into OTT from the more standard ecosystems of television, film, and even music. We have seen some minor indications of this.

Louis C.K. has seven of his comedy shows available to purchase on his website. Many of which were exclusive for a period of time. Kevin Spacey sold a film direct to consumers via a service called VHX and both George Lucas and Steven Spielberg have made comments that direct to fan distribution will fundamentally change the movie industry.

Political and social views aside perhaps the best example of this talent movement is the rise of Glenn Beck’s TheBlaze TV Network. $10 a month for all you can watch live and on-demand content from a former host on Fox News.

Last summer BTIG analyst Rich Greenfield estimated that Beck has 400,000 subscribers. In addition Beck claims he has over 25 million unique visitors to his website every month and a total footprint of over 50 million which helps him sell more books, buy tickets to see him on tour, and more. Plus he has carriage agreements with over 100 television providers, eleven of those in the top 25 nationwide including Dish Network. I’m no math genius but figure that’s at least $60 million in revenue per year on the conservative side. Not bad for something launched in 2011.

Perhaps even more importantly Beck has complete creative control. Something he probably didn’t fully have at Fox and something that for many media figures is critically important.

As Beck develops other talent on his network it stands he’ll get some nice pay days for whatever those folks get into next. A OTT farm system for talent is not a new concept. Disney’s acquisition of Maker Studios last year is another indication of how people believe that new talent can be developed within more niche OTT services and then moved into big and more mainstream services later.

So Glenn Beck started an OTT network by going direct to a ravenous fan base and thus maintaining creative freedom, expanding the sale of other items, and building a talent pool that can also be monetized. Remind you of the guy we originally were talking about?

I’ll wager we may see Jon Stewart go OTT. There are not many people in the world who I think could do it. The “five tool” kinda people with mad skills. Just sitting here I can think of a few others but not many. Now I could be totally wrong and Mr. Stewart announces tomorrow that he is in fact going to that cabin in the woods. But maybe, just maybe, this is another leaf about to drop in the changing season of entertainment.

The next logical question to ask of course is if he did it, what effect could it have? For Comedy Central specifically it could mean a lot. Does anyone watch Comedy Central without Stewart and Colbert around? If Comedy Central now stumbles that could be problematic for Viacom, their owners, which in turn could create challenges for Viacom’s other networks like MTV and Nickelodeon.

More broadly, if Stewart left TV to go OTT and then another big talent did it and then another and then ten more that could have a fundamental impact on the traditional television industry. Losing big stars means not only lost viewers and revenue but also influence. Television is one giant marketing wheel, each show promoting the next. Lose a big show (or talent) and the smaller ones suffer. Lose talent and your not the hot topic on twitter anymore. Lose talent and you have a tougher time developing new talent. Does a new “Daily Show” turn out new talent like it did before if everyone is watching the up and coming talent on Jon Stewart’s new OTT network?

Again, I could be wrong here. He could go to that cabin. He could move to another network. He could make a folk album for all I know. But Mr. Stewart has proven over the course of 15 years with “The Daily Show” that his is one of the most media savvy talents around. He is well aware of the changing sea. He has the tools and the capabilities to go direct to consumers and reap the rewards. What do you think, will he do it?

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