American Idol: The Perfect Package

No, the title of this article does not refer to any part of Justin’s anatomy. I’m talking about what a goldmine Fox has managed to find in American Idol. For those of you unfamiliar with how television shows make money, call this a lesson from Media Moolah 101.

Most people are aware that when it comes to broadcast television shows the profits come from the commercials. The more people watch a show, the more the network can charge for the 30-second ads. For decades this has been the way of things; so much so in fact that rumor has it that the concept is actually etched in stone and preserved forever in an airtight room in the bowels of Radio City Music Hall. With American Idol however, Fox, and to a lesser extent Simon Cowell, have rewritten the rulebook.

Any of the broadcast networks would thrill to have the number one show. Fox is beside itself with glee, because with the exception of a brief two weeks of the Simpsons a decade ago, they’ve never achieved that pinnacle. Last week American Idol took both the #1 and the #2 spot and it seems a sure bet to increase its viewership figures again this week. This means advertising revenue is going to go through the roof. But look closer. Coke and Ford have both paid a hefty price to have products prominently displayed in the show. They have also sponsored special segments in which not only the products themselves, but also the company logos, are onscreen for several minutes at a time. Product placement has long been a means for Hollywood to make some money to boost the bottom line on film budgets, but it has never really been fully exploited in a weekly television series until Survivor made deals with Pepsi for heavy Mountain Dew placements. Now almost every reality show has some form of commercial woven into the actual game strategy. You can hear the cash register in the background. Ca-CHING!

Don Pardo, tell ‘em what they’ve won!

This Friday Fox will be posting the complete list of cities where the American Idol LIVE! tour will be landing. More free advertising for Fox, along with a nice little taste of the ticket sales. Let’s not forget that the tour itself will be a commercial reminding all who attend to tune in for season two. Each week we are treated to the previously rejected contestants sitting in the audience. Have you ever wondered why they look so forlorn? It isn’t because they’ve lost. It’s because Fox owns them for a little while longer. They are contractually obligated to go on tour. They all signed binding documents that basically say “You cannot pursue an independent career until WE say so.” They cannot sign a deal with any label but Simon’s until they have fulfilled all aspects of the existing Fox contracts. They cannot release a CD or go on tour until Kelly – uhm, I mean the surprise winner, whomever it might be – releases his or her first album. Each of the final 10 contestants are locked in to doing promotional work for Fox until that time. Also, it doesn’t take a crystal ball to realize that before the year is out Rick Dees and every other DJ in America will be saying, “Debuting this week is the hot new single from Fox Television’s American Idol contestant, insert name here!” Ca-CHING!

But wait there’s more!

If you watch closely during the “what they did this week” segments you will see that each of the competing singers has done local radio and television appearances. If you are particularly observant you will also notice the Fox logo on the set of each appearance. This is because each interview is on a show produced by a local Fox affiliate or Fox-owned radio network station. Immediately following American Idol in most cities the local news is broadcast on these same Fox affiliate stations. Each week one of the top “news” stories is about the scandal of the moment on – you guessed it – American Idol. Bigtime ca-CHING!