The New York Times printed a fascinating article this morning about American Idol.
It seems that although the show’s ratings have declined (3 years ago AI was watched by 30 million viewers an episode… this year 25 million an episode… and BTW, AI is still the top rated show on television) Idol’s revenue has increased dramatically, including what they are able to charge per advertising slot.
As the business models all over the entertainment industry change dramatically… this article is a MUST read.
Kudos to Edward Hyatt for a great story:
Can a television show with a shrinking audience actually increase its revenue?
In the case of “American Idol,” the answer is yes, and the manner that the show’s creators are going about it could change the way that producers and broadcast networks think about the longevity of reality television programs.
Despite losing viewers in each of the last three years, “American Idol,” still the top-rated series on television, is generating ever-growing profits for its creators and, it appears, for Fox Broadcasting through brand extensions, marketing arrangements and licensing fees.
The deals, which include products as disparate as ice cream and trading cards, as well as the more familiar partnerships with iTunes and AT&T, have driven tremendous growth in the profitability of “American Idol,” according to the public financial statements of the parent of 19 Entertainment, the company founded by Simon Fuller, the creator of the show.
Those financial statements include documents that break down how revenue is split among Fox, 19 Entertainment and FremantleMedia, the production company behind the show.
“They are just raking in the money, hand over fist,” said Brad Adgate, a senior vice president for research at Horizon Media.
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