News Corp. frets about 'American Idol'
The iconic show has been a huge moneymaker but is losing viewers fast.
News Corp. (NWSA), which reported better-than-expected quarterly earnings Wednesday, is worried that "American Idol" is running out of gas.
Ratings for the 11-year-old reality show have been down by double digits this year. Speaking to investors, COO Chase Carey said he isn't ready to hit the panic button quite yet. He has made similar comments before.
The show is averaging a 5.4 rating this season, down from 8 a year ago, and may lose its top spot on the list of most-watched prime-time shows on broadcast television to "Saturday Night Live," according to MediaPost.
"It's a big profitable No. 1 show," Carey said. "It was down more than we would've liked this year. But it's a big valuable franchise and makes a lot of money. We certainly think we've got a lot of life left in it, and I think our challenge for next year is to put some fresh energy" into it.
What Carey meant by "fresh energy" isn't clear. Jennifer Lopez and Steven Tyler were hired to do just that and have failed. News Corp. is probably eager to restructure their contracts. To this casual fan, the show hasn't been the same since the departure of Simon Cowell and to a lesser extent Paula Abdul. Moreover, the contestants on "The Voice" are far more talented than their counterparts on "American Idol."
Musical aesthetics aside, investors should start to worry as well. Television networks sell advertising based on guarantees to advertisers about viewership from particular demographic groups. If broadcasters fail to meet those targets, they have to provide "make goods," essentially free commercial time.
Whether "American Idol" has reached that threshold is difficult to say. During the quarter, News Corp.'s television business was a weak spot. Operating income fell to $171 million, and, excluding the absence of the Super Bowl, lower ratings at the show offset higher advertising rates.
"American Idol" reportedly makes more than $7 million per 30 minutes, by far the most of any television show. That translates into roughly $730 million or so in annual advertising revenue. It's not a cheap program to put on. The judges and host Ryan Seacrest are probably making more than $10 million each. Seacrest's future at "American Idol" came into question after he recently signed a contract with Comcast's (CMCSA) NBC Universal that enables him to contribute to Super Bowl, Olympics and presidential election coverage.
In the coming months, Carey and his boss, Rupert Murdoch, are going to have to decide how much longer News Corp. can squeeze money out of "American Idol." The show is dragging down ratings of the entire network, which, season to date, has attracted an average viewership among people age 18 to age 49 of 3.24 million, down 13% from a year earlier. That is still the most among the broadcast networks, Media Post says.
"American Idol" will survive for now because it is the least painful option available to News Corp.
Jonathan Berr does not own shares of the listed companies. Follow him on Twitter@jdberr.
I am personally glad that "adults" did not tell kids not to buy Elvis records or the Beatles records and so forth. How effing selfish are the oldsters of today? you had your time--a LOOOONG time ago. You hate young girls? How about a suicide protest? Be on the news! You'll be famous, oldster!
and those "I hate the judges" comments, almost as oblivious and stupid. Why? Because they don't call you first and make sure your opinions match theirs? Get a grip. and Bart man: all the Klan say to you Represent!
Joshua is way overblown, and over praised to boot. Cannot stand that screwed up face way of screeching, and his emoting is just ridiculous. Hate that the judges keep boosting him up, as he won't sell well at all for them. Jessica is another one, but she has a decent voice. However, she sings songs way too old for her, and some of her stage performances were too slutty. Not good. Philip is extremely musically talented, but his voice and style are not for everyone. Still, although I wouldn't buy from him, I think he would do the best on the market. Colton could have done well too. Thought Elise was very talented too.
Hate the extreme pimping, and the judges act on the night Jessica was eliminated was way out of line and rude to the others. I do not care for the SAVE at all.
Will stop watching now, as I don't care who wins at this point. Hubby stopped after Colton left. Won't even watch next year. We are done in this house. Let those judges just choose the winners and be done with it.
By the way, Clay Aiken, Adam Lambert and probably some others have far better voices and more stage appeal than their Joshua. Ruuuuuuban got all the pimping, but, at least, he had a decent ballad voice. No stage presence though.
stage skills. Great ballad voice though.
the entire show is a joke. all of the people that created the music they are trying to mimic wouldn't even make onto the show. from atom ant to frank zappa, none of them would fit the modle they are looking for. they don't have a clue what makes rock and roll what it is, or any form of contemporary music for that matter.
What else makes the show hard to watch:
1. Too long - make it one hour
2. Too much self promotion of judges. It is not about them.
3. Judges need to be honest in their comments.
4. The method of selecting the Idol is really flawed. As everyone as said, Philip will probably win because he is cute, not because he is the most talented. It is hard, as an adult, to watch when you know the teen girl is picking the cute guy every time.
The corporation does not care about this comment board or what you think. They don’t care who wins or what the judges say. They don’t even care about the talent… all they care about is that all you mindless drones are sitting there watching their show so they can pump you full of commercials. Because to them, it’s big money! There have been great shows on in the past, educational shows that were entertaining like Jericho that could give you a look into the idea of what could happen after a nuclear war. Or like Eureka that show you how technology affects you on a day to day basis but with humor. The list is long and the shows are gone as the corporation project to the children as there demographic hoping to brain wash them into getting the next new fad. If you really want to hurt the corporation, then don’t watch your TV’s for a week, read a book. All of their ratings will fall on the floor and they will have to rethink their strategy. The voice of the people is strong… as a group. Just remember one hand can’t clap in the rain!
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