For nearly 70 years, late-night TV was a gold mine.
A guy in a suit behind a desk, cracking jokes, chatting with celebrities, backed by a live band. Night after night, millions tuned in. It was cheap to produce, easy to sell ads against, and wildly profitable.
It started with Steve Allen in 1954. Then came Jack Paar.
But it was Johnny Carson who made it a cultural institution.
He owned The Tonight Show for three decades. His opening monologue was a must-watch. His couch interviews launched careers. He wasn’t just a TV host — he was the pulse of America after dark.
Johnny Carson, pictured just years before becoming host of The Tonight Show in 1962.
Source: By CBS-Gabor Rona, photographer.
Jay Leno and David Letterman picked up where Carson left off. By the 1990s, their nightly ratings battles were front-page news. The 11:30 p.m. slot was the most valuable time on network television.
These shows were cash machines. They followed the evening news, meaning the audience was already there.
With low production costs and high ad rates, margins soared. Many shows topped 40% profit margins — unheard of in Hollywood.
But that was then.
The model didn’t collapse overnight. It crumbled one YouTube clip at a time.
Today, you don’t need to stay up past your bedtime to catch a monologue or sketch.
Everything is online, chopped, clipped, and posted minutes after it airs.
And you don’t even have to be home. People watch on their phones in bed, on the train, or while waiting for coffee.
YouTube is the new remote control. And for anyone under 40, it is television.
YouTube’s Quiet Domination
What most investors miss is how dominant YouTube has become.
It leads U.S. streaming watch time. It averages over 200 billion “Shorts” views per day. It generates more than $40 billion in annual ad revenue.
And it’s buried inside one of our long-term holdings — Alphabet (GOOGL).
Shorts now generate just as much revenue per watch hour as traditional YouTube videos, and in some countries, they generate more.
Two billion users log in to YouTube every month. AI powers everything from dubbing videos in multiple languages to delivering content that fits your taste.
This isn’t just a platform. It’s a global entertainment engine, eating up attention and ad dollars. While late-night television is fighting for scraps, YouTube is growing like a weed.
The networks know it.
CBS just pulled the plug on The Late Show with Stephen Colbert. A show that made money just a few years ago now loses $40 million a year.
Budget cuts didn’t help. Neither did dropping a night of programming. The business model is broken.
Same goes for…
Late Night with Seth Meyers. They cut the band.
James Corden’s show wasn’t replaced.
Taylor Tomlinson’s After Midnight barely made it to sunrise.
Ad spending for late-night has been nearly cut in half since 2018.
The old model is toast.
It used to be that if you wanted attention for your movie, you sat across from Leno or Letterman. That was the biggest spotlight in town.
Today, actors go viral on TikTok.
Or sit down with a YouTube creator who reaches 10 million subscribers from their basement studio.
This has nothing to do with quality.
Colbert, Kimmel, Fallon… they’re still at the top of their game (although I don’t agree with their political views).
But the audience isn’t sitting on the couch anymore.
They’re watching what they want, when they want, from whoever they want. No more gatekeepers. No more fixed time slots.
This is a classic case of disruption.
A winning model, built for another era, now crushed under its own weight. Big theater. Big crew. Big salaries. All too much for a shrinking slice of attention.
But here’s the thing: disruption isn’t something to fear. It’s something to recognize. Because every time one door closes, another opens. And YouTube didn’t just close the book on late-night TV. It opened a whole new chapter.
It gave rise to a thousand new stars.
Here’s a quick snapshot of the top YouTube influencers and what they’re known for:
MrBeast — 415 million subscribers
An American creator known for over-the-top stunts, giveaways, and philanthropy.T-Series — 300 million subscribers
India’s top music label, posting Bollywood songs and film content.Vlad and Niki — 140 million subscribers
Two Young brothers creating playful, kid-friendly videos and toy adventures.
As investors, we’re not chasing the past.
We’re focused on where the attention is going—and that’s YouTube.
That’s why we’re holding Alphabet, and I hope you are too.
If you have questions, you can send them to me at [email protected].
And follow me on X here for daily updates.
Regards,
Charles Mizrahi
Prosperity Insider
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