Mr Letterman stunned the broadcasting world last week when he said he would retire next year, ending a three-decade career at the top of the late night perch.
His replacement presents a satirical show – The Colbert Report – on Comedy Central, which is part of Viacom. Both Viacom and CBS are controlled by 90-year-old Sumner Redstone.
Replacing Mr Letterman was a top priority for Les Moonves, chief executive of CBS. Late night television is an important profit centre for US networks: advertising revenues across the industry have slipped in recent years in line with audience fragmentation and competing shows on cable television, but late night presenters can help shape a network’s brand.
Mr Letterman announced his retirement shortly after the debut of Jimmy Fallon on NBC’s The Tonight Show. Mr Fallon has been a ratings success and has succeeded in wooing the younger audiences craved by advertisers.
CBS will hope that Mr Colbert, 49, will inject some energy and dynamism into the late night format – and provide competition for Mr Fallon. “Stephen Colbert is one of the most inventive and respected forces on television,” said Mr Moonves in a statement.
“David Letterman’s legacy and accomplishments are an incredible source of pride for all of us here, and today’s announcement speaks to our commitment of upholding what he established for CBS in late night.”
The Late Show, produced by Mr Letterman’s company, Worldwide Pants, generated close to $180m in advertising revenues in 2013, according to Advertising Age. By contrast, The Tonight Show on NBC, then presented by Jay Leno, made about $113m.
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