Even though American Idol is still the most-watched show on television, its ratings have slipped for the past three years and are now down from a high of more than 30 million viewers an episode to an average of 25 million viewers an episode.
But despite this ratings drop, the show continues to make more money from advertising, licensing fees and various ancillary revenue streams. We already told you that Idol makes an estimated $15 million an hour as the most expensive ad buy in primetime. But as the gap between the ratings for Idol and other shows has widened, Fox Broadcasting has been able to charge more for ads, pulling in higher revenues.
In fact, according to TNS Media Intelligence, ad revenue has grown in each of the last three years, reaching $903 million last year—more than double what it was three years ago.
But the real growth in revenue and profits comes from licensing and marketing deals like those with iTunes, AT&T and ice cream and trading-card companies.
NY Times: David Lunar, a senior vice president for interactive and consumer products at FremantleMedia, which produces the program in partnership with 19 Entertainment, said this year that the company had experienced “eight straight years of growth” in licensing and merchandising…
Fox also has sponsorship deals and receives royalties from the sale of performances by Idol contestants, presumably via iTunes downloads.
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 per cent from 69 per cent in that span.
Adding revenues from Idol shows in other countries, So You Think You Can Dance and music sales related to all Idol shows, 19 Entertainment’s revenue last year was $223 million, up from $151 million two years earlier.
Fremantle reportedly receives one-third to one-half of the revenue streams that benefit 19 Entertainment.
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