FOX Executive Says American Idol Could Last 17 Seasons

By On 06/01/2012 · 73 Comments · In American Idol

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A News Corp. executive told an investor conference Thursday that FOX is optimistic that it can stop the aging American Idol’s ratings decline. The exec also said the show could last up to 17 seasons. (Via The Hollywood Reporter)

Speaking at the Nomura 2nd annual U.S. Media & Telecom Summit in New York, David Haslingden, president of the Fox Networks Group, said the network is “absolutely committed” to the music talent show, which has aired for 11 seasons. He vowed it would “throw all resources’” at improving its ratings again.

“This is still the number one non-sport show in the United States,” he emphasized though. “It’s delivering an average audience across this year’s 55 hours of 19 million people. This is a huge powerhouse show. So, I would say that any network executive in the country or probably in the world would love to be sitting up here, saying we have this franchise and we’re dealing with the fact that its ratings are off a bit.”

Calling it “an American staple” with “enormous” brand loyalty, Haslingden said that “we’re actually optimistic that we will arrest its ratings decline and this show is going to continue on.”

How long? “We are optimistic it’s going to continue on for 15, 16, 17 seasons,” he said.

Did Haslingden’s pull “17 seasons” out of his butt? I’m not sure why an exec would put an expiration date on a show they’d love to see last as long as possible.

One thing seems certain–between the newly christened Core Media Group’s vow to fix Idol’s problems, to FOX executives lamenting the changes weren’t made last season–the show appears to be in for some BIG changes. And I would not be surprised if the retooling started at the top, as in bye bye Nigel Lythgoe and Ken Warwick.

Nigel’s reflectance to embrace change can’t be sitting too well with executives at this point…

 
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  • http://twitter.com/eilonwya10 Eilonwy

    Gosh, this is harder than you made it sound.

    Wait until I start babbling about amortization of intangible assets, such as music catalogs! Heads. Will. Explode.

    I think I finally found the numbers -(The figures in thousands, the first figure is revenue, I’m assuming the last figure is the profit from the show?)2008 - 96,028   73,573
    2009 - 79,185   60,637
    2010 - 91,092   58,609

    You found the right stuff. Yes, the left number is revenue, and the right is gross profit. (So my referring to “grossing more” confused the issue — my brain was thinking “gross revenue” rather than “gross profit,” but whether an ordinary, sane reader would read it that way is a coin toss, at best, and anybody in the financial field would growl at me for not being clearer. I’d also frankly forgotten that S9 had ridiculously high cost of sales.)Gross profit takes out direct cost-of-sales but not operating costs like normal staff salaries. The “star” salaries like Seacrest’s are part of CoS, as are tour costs.

    I’m trying to see if they lost money on the Season 9 tour (given that this is the justification used for cutting pay to the idols in Season 10), but can’t seem find any info on that.  

    Unfortunately, you won’t find it in the 10-K, and its absence doesn’t mean anything either way. The way the segments are defined, CKx just doesn’t have to say. Seeking Alpha never had earnings call transcripts for CKXE, so there’s no easy way to find out if an analyst ever asked. (Earnings calls fall under SEC regulation, so while answers about past activities can be evasive, they do have to be true as far as they go.)

    I don’t understand how the revenue from So You Think You Can Dance is more than Idol for 2009.

    The secret is that SYTYCD aired twice in 2009: the usual summer slot, and then a new season in the fall. Fall ratings were crappy, and it went back to being a summer-only show the next year.

  • http://pulse.yahoo.com/_WIHKL34XDORTS2UZP4SWUUTG3U randi

     

    This is from the article at the Daily Mail:Adam Lambert plays the the Royal Albert Hall on Thursday alongside Leona Lewis.
    Did I miss this annoucement?  Or is this a new date?

    they don’t need to re-tool they show at all.  In fact what they need to do is get the show back to what it was when it was at it’s peak and that’s a show that focuses on great singers singing classic songs. 

    stop focusing on the judges, stop giving tongue baths to contestants who can’t sing and stop this nonsense with the instruments for every performance.  A performance here or there with an instrument is fine to show an artists flexibility and skills outside of being a great singer but allowing these contestants to hide behind their instruments is ridiculous.

    Also, stop all the OTT stage production with the choirs and trumpet players and back-up singers.  All of this is used to mask sub-par vocals and it’s become more and more obvious with each passing season. 

  • luvadamlambert

    YAYYYYYYYYYYYYYY :D

  • Hazehel

    The secret is that SYTYCD aired twice in 2009: the usual summer slot, and then a new season in the fall. Fall ratings were crappy, and it went back to being a summer-only show the next year.

    Thanks for the explanation.   Idol’s numbers still look low though, remember it’s the biggest show on TV, and the number include other things like tour.   The ad revenue must be in the region of 800 million, I wonder how they slice the pie.  Anyone knows the business of TV shows, Idol in particular?

    ETA – they don’t seem to mention pay for the judges, so presumably they are paid by Fox, also the cost seems lower for Idol, so perhaps Fox also bear some of the cost?

  • http://twitter.com/Quu3 Q3

    Regarding the statement “We are optimistic it’s going to continue on for 15, 16, 17 seasons,”…

    There is no chance that David Haslingden meant that it referring to only 4, 5 or 6 more seasons. The are trying to convince people that this is a sustainable show. — not one that will be gone in the near term.  I agree with MJ — I think he pulled those numbers “out of his butt”.

    –

    For all the talk about ads — one other big change in Idol is the increase in product placements.

    Here are the 2011 numbers

    “American Idol”

    Product placement occurrences: 577

    Episodes in 2011: 39

    Network: FOX

    This is something that has increased dramatically since 2006 — this is another way that the show earns ad revenue but also erodes the attention from the Idols.

  • http://twitter.com/eilonwya10 Eilonwy

    ETA – they don’t seem to mention pay for the judges, so presumably they are paid by Fox, also the cost seems lower for Idol, so perhaps Fox also bear some of the cost?

    The “not mentioning judges’ pay” thing bothers me, as it should be a substantial cost. Fox is owned by News Corp, which is so ginormous that its 10-K detail doesn’t extend to any single TV show. 

    But glancing at NEWS’ 10-K reminded me why revenue to 19/Idol may look low. Ad revenue would have been split with Fox. Offhand, I have no idea what the formula for the split would be, but somebody else probably will know.

  • Hazehel

    But glancing at NEWS’ 10-K reminded me why revenue to 19/Idol may look low.

    I don’t know if I’m reading it right, but is it saying that revenue from Fox TV network is ~4 billion?  If the ad revenue estimated by other people for Idol is correct (800-900 million), doesn’t that mean Idol is responsible for a quarter to a fifth of Fox’s revenue?  I’d be somewhat shocked if that is true.

  • http://twitter.com/Quu3 Q3

    The judges contracts are not public but based on 2006-2011 when CKx was public and had to file SEC reports — the contracts are with CKx. Fox agreed to pay $5 million of Ryan’s $45 million contract but they pay that to CKx but Fox does not own the show or produce it.

    Here is the info on Ryan:  http://www.deadline.com/2011/05/ryan-seacrests-huge-salary-contributes-to-american-idol-profit-swoon-at-ckx/

    There is an error at the end of the article — “CKX says that it’ll do just fine without Fox’s $5 million check:
    Universal will provide a “significantly higher” payment to CKX for each Idol-related recording it sells. Fuller left CKX last year but serves as a consultant and collects 10% of its Idol-related net profits.”

    The $5 million they are referring to was a $5 million payment that CKx got from Sony not the $5 million they get from Fox.

    As far as I can tell — Ryan is the one getting the biggest checks now what Simon Cowell is gone.

    ***

    The new executives that CORE Media has brought on have personality brand and digital management backgrounds. http://www.thewrap.com/tv/article/american-idol-parent-co-ckx-relaunched-core-media-group-42206

    Looks to me like they are organizing to re-engineer the business model.

  • http://twitter.com/eilonwya10 Eilonwy

    Hazehel: I don’t know if I’m reading it right, but is it saying that revenue from Fox TV network is ~4 billion?  If the ad revenue estimated by other people for Idol is correct (800-900 million), doesn’t that mean Idol is responsible for a quarter to a fifth of Fox’s revenue?  I’d be somewhat shocked if that is true.

    I’d want to know revenues from other shows before drawing a conclusion on that one. A big hit show could contribute a disproportionate share of revenues… and Fox TV would presumably record only its share of Idol’s ad revenue (hmmm… depends whether revenue is reported gross or net…), so it wouldn’t be anywhere near the whole 800-900 million. If nobody else comes up with a good answer, I’ll try looking harder this weekend because I’m curious — but I’ve never tried to untangle the financial relationships between production companies and TV networks, so my head might explode.

    Q3: based on 2006-2011 when CKx was public and had to file SEC reports — the contracts are with CKx.

    Okay, so they’re just not highlighting the numbers. I’ll confess that I didn’t want to go back and wade through the morass of CKx’s reporting and couldn’t remember.

    Looks to me like they are organizing to re-engineer the business model.

    ITA. The talk in the NYT article about acquiring other entertainment-related businesses was also interesting. I’d wondered at the time of the acquisition what Apollo was aiming for, other than cash flow, so I’m kinda relieved to see pursuit of business improvement and synergies.

  • Hazehel

    The judges contracts are not public but based on 2006-2011 when CKx was public and had to file SEC reports — the contracts are with CKx. Fox agreed to pay $5 million of Ryan’s $45 million contract but they pay that to CKx but Fox does not own the show or produce it.

    We know about Ryan because he was mentioned in the report, but nothing is said about the judges.  I can’t remember the exact figure, but the judges are paid more than the cost given in the report, can they leave out such a big sum in their report?

  • Karen C

    All those talk about getting rid of WGWG in other threads (and indeed this whole season), making it sounds as if people who watches Idol hates them, that Phillip will fail massively, whatever. Nothing could be further from the truth. Fans are coming up with ideas how to alienate its core audience and kill the show.

    The problem isn’t Idol, it’s X-Factor and The Voice and the endless number of singing shows popping up, and there is very little Idol can do about those shows, or what Fox and other networks choose to do. It’s not so easy to come up with a successful formula, trying to change it is always risky.

    Maybe the idea is to separate Idol from the other shows, by sticking with a different type of singer than what the X Factor feature.   I agree if the same type is winning every year, changing tha could hurt the ratings more than it helps.

    In fact, the one change I would make is to go more in the singer songwriter direction by allowing contestants to sing their original music on the show.  Though this was allowed in the X Factor, it was in a different genre that probably wouldn’t be on Idol.

    I think the idea of counting Itunes sales like the Voice does is a good one, since people are less likely to be an option for power voting.  Even though in most cases the winner does have the highest sales when they are announced.

  • http://twitter.com/eilonwya10 Eilonwy

    We know about Ryan because he was mentioned in the report, but nothing is said about the judges.

    I think I have the answer on judges, and it’s in a different part of the report from the segment revenues, just to make life that much more challenging. This is from the very last 10-K, page 6 (bold added):

    19 Entertainment, Fox and FremantleMedia have entered into a series of agreements, the most recent of which was entered into in November 2005, which together encompass the terms under which Fox is granted the right to air American Idol in the United States…. [yadda yadda]…. Fox pays FremantleMedia a flat license fee per episodic hour, as well as a premium license fee for each hour in excess of the initial season order. These fees are used by FremantleMedia to fund American Idol series production costs, excluding the fees of the judges and certain other costs, over and above the license fees, which are paid directly by Fox.

    My read is that the “which are paid directly by Fox” modifies “fees of the judges” as well as “certain other costs.” So that’d have Fox paying the judges’ salaries, while CKx pays most of Seacrest’s.

    I’m glad you pressed it, Hazehel, as I don’t think I’d given that part of the 10-K much attention before — I was always interested in segment profits and corporate debt.

    Judges’ fees are probably a drop in the bucket for Fox… I’m still planning to see if I can make any sense of News Corp’s reporting, though, to try to understand the ad revenue relationship.

  • http://twitter.com/eilonwya10 Eilonwy

    And I can partly answer the Fox revenue question, too! It’s one of those reporting things that drives casual readers nuts, and if I hadn’t waited until after my first glass of wine, I don’t think I would have spotted it easily.

    Fox gives its revenues in millions, while CKx uses thousands, so even if we attribute the whole 800,000 in Idol ad revenues to Fox, we get 800,000/4,778,000,000 for the Fox TV revenues, or less than 2%.

    That still doesn’t answer what we really want to know, which is how the ad revenue is split; but I don’t think that’s achievable from the 10-K data. I wish it were.

  • Sparkles

    Why would he say 17 seasons? Everyone knows it’s going to be 18 seasons
    because Kristy Lee Cook was born on January 18th.

  • Anonymous

    This is in the running for “favorite comment ever on MJs,” hands down.

  • Guest

    WHAT?! 17 Seasons? Great. With more music being released on iTunes, my fan fictions are longer than ever. I’ll never get them done! 6 more seasons will take me through college and into graduate school; I’ll need all the help I can get to make it through spring semesters!

  • Anonymous

    Well you know, 18 (the day) – 1 (the month of Jan.) = 17.  Okay, don’t shoot me!!!! ha!

  • http://twitter.com/KariannHart Kariann Hart

    6. Bring in mentors the actually fit the week’s current theme.

    Yes!  When you have CAROLE KING week, you bring in Carole to mentor, not Babyface.

    I LIKE THE IDEA OF 90 MINUTES. THE COMMERCIALS ARE JUST TOO LONG.

    I want to see and know more about the Idols alumni. There’s some great talent out there – better than some of the super stars who cannot sing live.

    I wish American Idol would hire at least one judge from “The Sing-Off.”  I bet Idol doesn’t know what to do with Randy.  JLo has indicated she might not come back.  Steven is there BECAUSE HE’S FAMOUS not because he’s a good judge.

  • Hazehel

    Fox gives its revenues in millions, while CKx uses thousands, so even if we attribute the whole 800,000 in Idol ad revenues to Fox, we get 800,000/4,778,000,000 for the Fox TV revenues, or less than 2%

    Yes, the numbers are 4,778 million for 2011, 4,228 million for 2010 and 4,051 million for 2009, but the 800-900 million figures for 2007-2009 came from someone else (Q3 posted those, it’s not 800,000).

  • http://twitter.com/eilonwya10 Eilonwy

    Well, eep, so much for my math skills!

    I’m going to sit back and admire Sparkles’ wit, as I seem to be out of my own.

  • Hazehel

    Come to think of it, Fox TV must have other sources of revenue like syndication, so Idol must contribute an even greater portion to Fox’s ad revenue.  I thinking Fox must be feeling rather fearful of Idol decline or possible demise given that X-Factor hasn’t quite set the world on fire yet.  

  • too-cool-for-school

    “We are optimistic it’s going to continue on for 15, 16, 17 seasons,”

    15, 16, or 17, huh? Very solid and reassuring guess. That’s like the Randy Jackson tactic at estimating things.

    At this point, Idol is never going to get 30 million viewers again or whatever it was pulling in its peak seasons. Even if ratings would sink to, 15 million, let’s say, that would still be pretty dang good.

    So yeah, I’m glad they’re ‘optimistic’ and will hopefully calm down now.

    It’s always going to have a fanbase and format-wise, I do feel like it’s the least tacky of all the singing shows, unless they make bad changes and screw it up. Just get better judges, screw the 2-hour shows (you too, DWTS and The Apprentice *taps watch*) and bring back the current themes/contestant’s choice rounds. I thought those were a really positive change we saw this season. Oh, and GOOD mentors, not just people that Jimmy is friends with.

    The voting is also an issue but they aren’t going to change that. No way, José!

  • http://www.facebook.com/leoquangvn Leo Quang
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