Ha ha. Those folks predicting the eminent demise of American Idol? Think again. A new report from the New York Times reveals that American Idol is raking in more moolah than it ever has– despite ratings that continue to decline–through brand extensions, marketing arrangements and licensing fees.
Robert Sillerman, CEO of parent company CKX Inc. says they’ve learned how to make money by watching the sports leagues, …We have learned the lessons of the sports leagues in that they have all these ancillary revenue streams, Sillerman adds, “And frankly, were just beginning.”
Here’s a real eye-opener for those who think Idol will never reach the dizzying heights of Season 5–it did in talent (arguably) and ratings. But in revenue? Nope:
That is particularly noteworthy given that, according to Nielsen Media Research, the average audience for …American Idol peaked three years ago, at more than 30 million viewers an episode. This season, each episode is attracting about 25 million viewers an episode.
Advertising revenue, which primarily benefits Fox Broadcasting, has grown in each of the last three years, according to TNS Media Intelligence, to $903 million last year. That is nearly double the level of three years earlier. Those figures do not include Fox ancillary sponsorship deals and other income, like royalties it receives from the sale of music performances by …Idol contestants.
Even though …American Idol ratings have declined, Fox has put more hours of the show on the air and has been able to charge a higher rate as its ratings lead over other shows has grown.
The revenue and profits of 19 Entertainment have grown even more quickly, according to the financial statements of CKX. Its revenues from …American Idol alone grew to $96 million last year from $67 million two years earlier, with gross profit margins expanding to 77 percent from 69 percent in that span.
Including revenue from …Idol programming in other countries, from music sales related to all the …Idol shows and from …So You Think You Can Dance, also on Fox, 19 Entertainment produced revenue of $223 million last year, up from $151 million two years earlier.
And, addressing that conventional wisdom that “Idol” will fold with the exit of Simon Cowell:
Even though the overall audience is declining, …American Idol appears to be in little danger of losing its crown as the top-rated television series. In the 2003-4 season, the first in which …Idol was the top-rated prime-time series, its lead over the second place show was about 7 percent. That margin has grown every year since and this year is 66 percent.
Mike Darnell, the president of alternative entertainment for Fox, who oversees …Idol and other reality shows for the network, said that …Idol could lose 12 percent of its audience every season and still be among the top 10 shows on television in 2016 ‘ even if every other show on television maintained all of its current audience.
Unless the lucrative ancillary streams dry up, and barring a catastrophic ratings loss (not likely, even if Simon leaves), American Idol should remain a TV staple for years to come.