News Corp. frets about 'American Idol'

The iconic show has been a huge moneymaker but is losing viewers fast.

By MSN Money Partner May 10, 2012 1:28PM
Image: Watching television (© Digital Vision Ltd./SuperStock)By Jonathan Berr

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.
Tags: CMCSANWSA
717Comments
May 10, 2012 2:34PM
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people are tired of the judges for a lot of reasons 1.) They repeat the same comments over and over 2.) Rarely do they really criticize 3.) Worst of all - when they have a favorite - they go way over board - case in point Joshua. 16 standing ovations - half the time he's screaming and you can't understand him - he's good - but by their take you'd think he was the greatest singer that ever lived - it's getting very old
May 10, 2012 2:27PM
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Maybe it's because people are sick of the popularity contest!! 
May 10, 2012 4:08PM
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To me, the problem with Idol isn't the talent (they are great!) or the judges (love them!)  The biggest problem I have is the 2 hour format when they only have 4 contestants left.  I don't want to see the duets and dances.  I only am interested in the competition.  They are milking it!
May 10, 2012 3:56PM
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The reason I haven't watched the show in the last 3 years is because it has become a popularity contest and not a singing contest. The best singer does not win the popular one does.
May 10, 2012 3:38PM
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I quit watching this year as it became apparent once again that 12 year old girls were pushing the vote based on how cute the guy is, not if he can sing.      IMHO a good solution would be for the judges to pick the bottom 3 then let America vote for the loser.   That way at least the bottom 3 is actually based on TALENT.
May 11, 2012 6:29AM
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Stop making the show so damn long!  We dvr it because we can't stand all the drag out and commercial breaks!  At this point, there' s no need for a two hour block of time! They fill it with so much fluff, spend 10 minutes asking the judges to repeat their opinions they just spent two hours talking about... there's more talk than singing... it's painful to watch anymore!
May 10, 2012 6:46PM
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They need to quit putting kids on the show so maybe the teenie bopper population will quit blowing up the telephone lines trying to vote for who is cutest vs the best voice.  Those that are left shouldn't be.  My husband and I stopped watching after the good ones were booted off.  One of my daughter's friends blew up the phones earlier in the season voting for who was "cute".  If they would stop putting teenagers on the show they might get a better following...
May 10, 2012 2:35PM
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I am sorry, but this year, all of them have gotten to be so milktoasty.  You never hear a bad comment about anyone...god I miss Simon.   Jennifer seems to not know a lot of the songs and frankly the singers this year really skewed way younger and affected.  Phil Phillips is getting by on his looks and certainly not on his faux Dave Mathews singing (if you call pushing out a BM singing).  Jimmy Iovine has actually been a breath of fresh air.

May 10, 2012 9:23PM
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Tell the judges to stop forcing the public to side with them on who should win.  They have been extremely prejudice this season and that is not fair to the other contestants.  Just because that is who they want to win stop shoving it down everyone's throat and let the public truly choose.
May 10, 2012 2:14PM
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What do you expect ? The show is played out, it's the same thing every year. The idols are talented but there is still a MANUFACTURED quality about it that people are getting tired of.
May 10, 2012 8:29PM
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The biggest thing wrong with this show is the judges showing favortism ( which in turns encourages people to vote for the judge's favorite.  Saying things like DAWG! you are the best singer I have ever heard on this show!!!  That just kinda blows the wind out of everyone's sail.  They are supposed to critque, not proclaim someone to be better than anyoone else.  Shame on Jennifer and Randy!!!!
May 11, 2012 6:10AM
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It's Idol's own fault it's losing viewers..If the "judges" don't stop trying to manipulate the vote with their vague negative comments, people are going to stop watching. It was more blatant this year than any year in my memory, and I've watched since the beginning. The word "pitchy" should be eliminated from their vocabulary!
May 10, 2012 3:43PM
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I don't totally agree with all the comments - but I do agree that it is time to make a change in the format or something - I also believe that JLo has been ok nothing spectaculay - but Stephen Tyler - I think he is great - they could get rid of Randy and it wouldn't break my heart - I do believe the talent this year has been exceptional - but I do not think Joshua is as good as they are making him off to be - I do not particularly like his style of singing and don't believe he should win
May 11, 2012 3:02PM
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I've watched American Idol for years and I'm not in that 18 to 49 age group.  I won't watch it anymore.  I think the contestants are way too young for what being "American Idol" is all about.  They are still babies!  I think the judges try to influence the voting public with their comments.  I like JLo but not her performances on AI.  I agree with a lot of people about Simon Cowell.  He told it like it was whether you agreed or not.  And back in those AI days, you didn't here the judges saying "vote for" this person.  I'm really disappointed.  Maybe it's time for AI to go.

 

May 11, 2012 6:22AM
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You can tell that they want Joshua to win and they have made it clear.  I really don't care who wins, but their blatant favoritism taints the show.
May 11, 2012 3:58PM
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The judges are the reason AI is going down hill...all the posturing and pomposity is ridiculous!!  Besides the nerve of them to tell us that "America got it wrong"!!  I call BS on that one...it is called "American Idol"...NOT...Who The Judges Pick"...They want to sit there and do a little opera clap after a brilliant performance by a contestant that is not "on their list" and give a standing ovation squat and twist and squirm around when "their" pick screeches out some ear splitting crap!  Then have the nerve to tell them they are the "best to ever be on the Idol stage ever" after Carrie Underwood just sang!  Please these people need to get a grip...give an unbiased critique and move on....when America starts voting...their opinion of who should win needs to be kept to them self...if they are unable to be professional unbiased then they need to be replaced by someone who can.... 
May 11, 2012 6:54AM
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The show needs 3 new judges! The way they gush & rave & give unwarented standing ovations every week is too over the top. Its a turn off. Simon made the show with his honest, blunt opinions. He only gave one standing ovation the whole time he was there, these guys do it every week, its sickening.
May 10, 2012 3:34PM
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Get rid of the current 3 so-called judges.  Tyler is too interested in making those sexual innuendo remarks, Jackson is tiresome with his "Yo" and "Dude" (how come he never uses 'Dudette' for the female singers on the show?)-Lopez is too busy being nice.  The show needs at least 1 judge in the old 'Simon' mold . . . 2 like him would be even better!
May 10, 2012 10:09PM
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For anyone who has watched the show there is no secret as to why it is tanking.  It's not the contestants it's the judges.  Their job should be to give constructive criticism and  independent , impartial critiques.  Instead, they all say the same thing and show obvious favoritism to their personal favorites.  Several weeks ago Randy and the gang went nuts when one of their favorites got the lowest votes.  They voted to save her and ran up on stage to stop her fairwell song by ripping the mike from her hand. Randy then proceeded to lecture the American public for making the wrong choice.  They should have all been fired on the spot !  Jimmy is the only one on the show who has an independent thought and the judges are visably nervous when he doesn't back their combined opinion. Simon was an insensative jerk but he spoke his mind and had the experience to know what he was talking about.  You didn't always agree but you always respected his opinion.  As long as the producers of this show continue to hire mindless celebrities who are ther to revive their own flagging careers the model will stay broken.
May 11, 2012 3:59PM
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If the judges wouldn't pick the winner it would help.They are down to 3 now and they have 2 screamers and Phillip Phillips. If Phillip doesn't survive, they'll have an idol that is just like everyone else they pick. It is refreshing to see something else in a voice. Skylar would have been a great finalist, at least she had spunk and a good country voice. Look how bid the country idols have become and how the others except for Daugherty, Clarkson and Hudson have done not much of anything. Judges always bad mouth anyone who is not their "fav" which hurts them in the voting. That is why these shows are having problems, the judges decide who wins. It is not an American Idol anymore, it's who the judges glorify. That is because they want someone who sounds (screams) like everyone else. Too many screamers, not enough performers.

 

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