ever since hugh grant came on, leno has consistently beaten letterman. letterman and his backers used to point to the lackluster cbs schedule, but now cbs dominates nbc.
circumstances have taken the edge off of letterman's schtick. i believe there is a limit to the number of viewers who want to watch someone seemingly unhappy to be himself.
the letterman crew (and even some media watchers) appears to be in permanent denial:
-But the ratings can't be a heartening development for the people at "Late Show," who have never quite believed that more Americans consciously choose Leno.
-"Late Show" executive producer Rob Burnett isn't so sure. He finds that Letterman's audience is loyal, that it sticks with the show throughout.
"Obviously, Dave isn't new and yet at the same time I constantly find college kids and high school kids who are discovering Dave and adding to his fan base," he said. [then why would rating fall?]
He cautions against counting Letterman out in this eternal competition....
"If CBS and NBC continue in their current models, Dave will beat Jay," Burnett said, "and I also don't think it matters...."
-Late Show executive producer Rob Burnett has said, "Clearly, Dave is the more culturally relevant of the two." This is undoubtedly true.

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