'Idol' audience down

The opening night of Fox's megahit beat out the network competition by a healthy margin, but viewership was 10 percent below last year and marked the softest start in four years. Big deal? "After six years of being up every year, it’s almost like it’s a meaningless drop," Fox executive Mike Darnell tells Variety. That's a little snake-oily for my taste, though it's true that audiences for all shows, even "American Idol," eventually peak out. The network has come to rely on the series as a key revenue generator, especially this year because of the writers strike. As reported by the LAT, Fox was initially selling 30-second “Idol” spots for up to $750,000, but prices will be even higher as the grand finale draws closer - as much as $1 million or more, which is crazy high for a series.

The network's profit will increase because of its ability to command pricier ad rates. Higher ratings for "Idol" mean more viewers will see promotions for Fox's other programs. Fox parent News Corp. acknowledges that, at least in the short term, the strike boosts its bottom line -- leading some writers to believe that the financial lift is encouraging company executives to hang tough against them in the labor dispute. Even before the strike, "Idol" was one of the most lucrative shows on television, generating hundreds of millions of dollars in profit for the network and its co-producers, FremantleMedia and 19 Entertainment. Fox declines to disclose how much it earns from the show, but according to TNS Media Intelligence, which tracks ad spending, "Idol" last year collected $810 million in revenue, up 39% from 2006. Some analysts estimate the show's ad revenue could soar 20% this year.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
 
Mark Lacter, business writer and editor was 59
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