.... an interesting article on American IdolNever mind the 10% drop this season in the average audience for American Idol.
Executives at the collection of disparate businesses around Fox's hit talent show are singing a happy tune as they head toward its finale this week.
A boost in airtime this season and the addition of iTunes as a fourth core sponsor (with Coca-Cola, AT&T and Ford) have helped to make the business "stronger than it has ever been," says Robert F.X. Sillerman, chief executive of CKX, the firm that co-owns the franchise with FremantleMedia.
His company is the best proxy for the health of what might be called Idol Inc.: CKX subsidiary 19 Entertainment — run by Idol creator Simon Fuller — collects license fees from Fox, signs recording deals with the winner and any other top-50 contestant it wants, manages their careers, handles the annual summer concert tour and licenses the brand.
CKX reported last week that its Idol-related operating income in the first quarter rose 63%, vs. the same period last year, to $24 million on revenue of $28.8 million, up 42%.
The main reason for the increase: Fox ordered 53 hours of Idol, up four hours from 2007. Although that's "a great business decision for Fox," Sillerman says, it may have diluted ratings for each show.
Next year will be different. CKX must agree to any network order beyond 45 hours, and Sillerman says, "You'll see slightly fewer (hours). We don't want to overexpose it. We want the pent-up excitement."
Ratings also may have been hurt by the absence of drama, apart from the competition itself.
"There was no controversy about why is somebody in this competition or deep background stories about them," he says.
Sillerman says he's "sure" that his company will sign record deals with semifinalists David Archuleta and David Cook — and may pick up others.
"There's a thought that there may be a (Chris) Daughtry lurking in the weeds in this year's crop, someone who was voted off a little bit early who might have some value."
That would add to an already strong recording business, a partnership with Sony BMG Entertainment. The first album by last year's winner, Jordin Sparks, is No. 23 on Billboard magazine's chart. And after 76 weeks, Daughtry's debut is No. 29.
Carrie Underwood, the 2005 winner, is still hot: All of her singles have gone to No. 1, and a few more are expected this year from her latest album, Carnival Ride, says Iain Pirie, who runs 19 Recordings U.S.
Although music-release schedules frequently change, he says that this year could see new albums from Kelly Clarkson and Ruben Studdard, Idol's first two winners, 2004 winner Fantasia, and finalists Daughtry and Kellie Pickler.
Producers already know the sales potential of the latest contestants. This year iTunes began to sell downloads of studio and live versions of the weekly performances. Sales figures are secret, but "What you'd find is that three or four of the songs in the iTunes' top 10 each week (of the Idol season) would have been from the show," Pirie says.
ITunes also was a big presence on Idol. It was shown or mentioned 44 times through May 6, according to Nielsen Product Placement Service. That made it the show's fifth-biggest product placement after Coca-Cola (2,716 appearances or mentions), AT&T (399), Idol's website (89) and Ford cars and trucks (69).
All told, the program had 4,184 product placements, up 4% vs. the same period in 2007.
Additional sponsors, still undisclosed, also will appear with Kellogg's Pop-Tarts at this year's American Idols Live concert tour.
Total revenue may drop: Ticket prices will hold (typically at $50 to $75 a seat), while the number of shows drops to 50 from last year's 56.
There are some sour notes elsewhere. For example, gift card company IdeaEdge recently took a $1.4 million write-down that it said in an earnings report was necessary because of disappointing sales of its Idol-branded gift cards.
Meanwhile americanidol.com attracted about 4.3 million unique visitors in March, down 41% from the same month in 2007, according to Nielsen Online.
Sill, Sillerman says, he projects at least 10% growth in each of his Idol businesses this year.
"Phone usage is up," he says. "Text usage is up. And for the finale, in New York, you'll see that it's the second-highest night of the year for takeout-food delivery (after the Super Bowl). If you're going to order out, get your order in soon."
Source:
http://www.usatoday.com/money/media/2008-05-18-american-idol_N.htm?csp=34
