The Man Who Would Be King
Here’s an interesting read from USAToday on Robert F X. Sillerman, the man who paid $114.2 million in cash and stock last year for rights to the name and likeness of Elvis Presley and Graceland’s tourist operations.
He also owns a little show called American Idol. Sillerman bought 19Entertainment Limited, the British company that produces Idol, in March 2005. His company, CKX, also co-produced the smash hit Broadway musical “The Producers” and owns 80% of the company that controls Muhammad Ali’s name and likeness.
That’s right. This season’s Elvis night was not a coincidence. Can we look forward to “Springtime for Hitler” performed as a group number next year? Or an Ali family member appearing as a guest judge? Ya never know. It’s called synergy folks.
A couple of interesting tidbits from the article:
“…That places a premium value on things that are ubiquitous, that don’t need a definition, ” says Sillerman, 58. “Everyone knows what it means when you say ‘Elvis Presley.’ I’m not a big believer in taking creative risk. The thrust for CKX will be to participate with the brightest and best to see if in these new distribution technologies there are ways to create other ubiquitous pieces of content or brands.”
Considering Sillerman’s aversion to risk-taking, I expect Idol in the coming years to tweak the format if necessary, but stick to it’s current formula: Young, fresh faced kids singing familiar cover songs that appeal to a broad demographic–gray-haired iconoclastic winners notwithstanding. Heh.
Sillerman has “grand plans” for Idol, “which contributed $35.1 million in revenue and $28.3 million in operating profit to CKX in the first half of 2006.” That made Idol, “the biggest contributor to CKX’s $101 million in revenue and $10.1 million in net profit for the six-month period.”
Sillerman’s “grand plans” include a songwriting competition:
Composers will post demos of their songs on AmericanIdol.com, where fans can listen and vote for favorites.
“The top 10 songs people vote for online will be performed by past Idols on a Fox special about three weeks prior to the (Idol) finale, ” says the show’s creator, Simon Fuller, who sold his company, 19 Entertainment, to CKX last year but still oversees its ventures.
“America will then choose which one of those songs will go on to be the winning song — and ultimately the first single from the winner, ” Fuller says.
Fox’s deal with CFX guarantees that Idol will air through 2009, with license fees increasing each year. The show’s revenue will undoubtedly continue to grow:
Fox’s payments account for “well under” half of CKX’s revenue from the show, Sillerman says. It gets more from foreign syndication, merchandise, record deals and concert tours. And this year, he’s adding deals with Kellogg’s, Dreyer’s Ice Cream and McDonald’s to run ads with Idol tie-ins that could drive viewers to the show.
“It’s like the Bud Bowl, ” Sillerman says. “Budweiser advertised outside the Super Bowl, and that created interest to watch the Super Bowl. That has never happened in (non-sports) television. But because we treated Idol as a sports property, that’s just what happened this year.”
Add another parallel contest and more advertisers with lucrative tie-ins. Treat the broadcast as if it were a sports property–January-May as the Idol season, culminating in the “Super Bowl” Idol finale anticipated and watched by millions of people. Will advertisers begin to debut new ad campaigns during the finale as they currently do during the Super Bowl? Additionally, Idol has an extra advantage. Unlike the typical sports season, Idol’s post-season–comprised of the summer tour and fall album releases–is extremely lucrative.
At this point, there appears to be no end to Idol.