By signing up David Letterman, Netflix is coming after a lucrative new old demographic

Trading late-night for anytime.
Trading late-night for anytime.
Image: AP Photo/Evan Agostini/Invision
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Former The Late Show host David Letterman is stepping out of retirement to host a six-episode talk show for Netflix in 2018.

The 70-year-old broadcast icon isn’t the most obvious hire for the streaming service. His average viewer when he hosted the CBS late-night show was 58 years old. Netflix’s US audience, meanwhile, skews much younger. About 81% of US broadband households with adults under the age of 35 subscribe to Netflix as of 2016, The New York Times reported (paywall), citing research from MoffettNathanson.

Globally, Netflix’s subscriber growth continues to soar. But back home in the US, it’s flat-lining. Many of the millennials who may be happy to cut the cord have already subscribed to Netflix. Older TV viewers present the biggest opportunity for continued US growth.

Just 19% of adults ages 65 and up have Netflix, Morgan Stanley found in a June 2016 survey with AlphaWise. Older Americans also watch more TV on average—a draw for Netflix—and are more likely to buy it through traditional channels, the Morgan Stanley survey found. (That’s partly why the web-video giant is signing more deals with traditional cable-TV companies to be included in set-top boxes like Comcast’s and Charter’s.)

That means Netflix needs more programming geared toward these viewers as well. Its model is built on being able to offer members new programming that fits their unique tastes month in and month out.

Letterman was beloved by Baby Boomers when he hosted during the so-called “late-night wars” with Jay Leno. And his audience aged with him; in the decade before Letterman retired from hosting The Late Show,  adults 50 and up each made up about half of Letterman’s overall viewership in 2005, data from CBS showed. But during his last season in 2015, 74% of his audience was 50 or older.

Letterman’s new Netflix series will be a little different than his gigs hosting The Late Show, or Late Night on NBC before that. Each hour-long episode will feature an interview with a single guest, as well as other segments led by Letterman, similar to the style of some news magazine. And rather than airing live at a set late-night time on broadcast TV, it will be available to Netflix subscribers around the world, anytime, on-demand.