AMERICAN IDOL: Ratings Down, But Profits Up

The New York Times published an interesting article yesterday discussing how AMERICAN IDOL has seen ratings slip each of the past three seasons, but yet they are making more money than ever. I have always felt soaps could do more to monetize themselves whether it be additional online content or merchandise.

Here are some interesting excerts from the NY Times 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.

While everyone in television, from Ben Silverman, the co-chairman of NBC, to the youth-centric programmers at MTV, is trying to find ways to increase profits as television audiences decline, AMERICAN IDOL is taking its cues not from the traditional broadcasting playbook but from the National Football League.

“We have learned the lessons of the sports leagues in that they have all these ancillary revenue streams,” said Robert F. X. Sillerman, chief executive of CKX Inc., the parent of 19 Entertainment. “And frankly, we’re just beginning.”

AI has lost five million viewers in three years, more than any daytime soap obviously (who don't have as many to lose), but have found a way to grow profits. The soaps all need good writing on a consistent basis, but with it or not, new ways to monetize, whether it be DVD releases or deleted scenes on iTunes or many other possibilities, could be a key element to the genre's survival.