"American Idol" is secret weapon for Fox
NEW YORK: "American Idol," the most-watched show on U.S. television, is capitalizing on its popularity and a strike in Hollywood to set records for advertising prices.
Before television writers walked out in November, the Fox network, owned by News Corp., commanded at least $780,000 for 30-second spots, about 30 percent more than in the previous year, ad buyers with knowledge of the deals said. Commercials bought now, just before the premiere of "Idol" scheduled for Tuesday, are priced in the low $900,000s, up about 50 percent from a year earlier, said the buyers, who asked not to be named because the figures are not public.
"Idol" will probably lead the News Corp. television network to victory for the fourth straight year in the race for prime-time viewers 18 to 49 years old, those most sought by advertisers. After losing viewers last year, the show may get new life in its seventh season as the strike limits what rival networks offer.
"It's the biggest thing in a landscape where there aren't as many big things as there used to be," said Geoff Robison, an ad buyer for Palisades MediaGroup in Santa Monica, California. Its clients include Del Taco Restaurants and HBO, a unit of Time Warner. "If you need to hit a lot of people at once, it's the best way to do that."
With the Super Bowl, the American football championship game, scheduled for Feb. 3 and "Idol," News Corp. has two weapons that competitors lack for weathering the strike. Fox is likely to overtake CBS, NBC and ABC in the weekly race for prime-time ratings earlier than in previous years, the News Corp. president, Peter Chernin, said last week. "We have good ratings," said Chernin, speaking at a Citigroup conference. "We expect to win the broadcast market by a wider margin this year."
"Idol" ad prices are the highest of any regularly scheduled TV show, said Brad Adgate, research director for the New York advertising agency Horizon Media. Episodes, which run from 30 minutes to two hours, generate about $19 million in ad sales for each hour, he said. Fox pays licensing and royalty fees.
A Fox spokesman, Scott Grogin, declined to comment on revenue and profit from the show.
"They've managed to keep the show fresh and people will come back for it," said Chris Marangi, a fund manager at Gamco Investors in Rye, New York, which owns almost 15 million News Corp. shares. "At News Corp., it's an important part of the television business."
The Writers Guild of America forced all the major networks to halt production of scripted shows and offer new reality shows that have not developed a following. "Idol's" success may widen the gap between Fox and other networks, ad buyers said.
"A show like 'American Idol,' a proven ratings winner and buzz builder, is going to benefit," said Peter Gardiner, chief media officer at Deutsch, an ad agency based in New York and owned by Interpublic Group.
Talks between the writers and the studios broke down for the second time in early December when the studios rejected the union's demands for a bigger share of online revenue. The networks were forced to shut down production of shows, air more reruns and change their program schedules.
General Electric's NBC Universal and CBS also shifted series from their cable networks to retain viewers and head off a loss of advertising sales.
"Idol" attracted more than 30 million viewers a night over the past two seasons and helped drive a 49 percent gain in profit at Fox Broadcasting in last year's third quarter ended March 31.
source: http://www.iht.com/articles/2008/01/14/technology/idol.php
Before television writers walked out in November, the Fox network, owned by News Corp., commanded at least $780,000 for 30-second spots, about 30 percent more than in the previous year, ad buyers with knowledge of the deals said. Commercials bought now, just before the premiere of "Idol" scheduled for Tuesday, are priced in the low $900,000s, up about 50 percent from a year earlier, said the buyers, who asked not to be named because the figures are not public.
"Idol" will probably lead the News Corp. television network to victory for the fourth straight year in the race for prime-time viewers 18 to 49 years old, those most sought by advertisers. After losing viewers last year, the show may get new life in its seventh season as the strike limits what rival networks offer.
"It's the biggest thing in a landscape where there aren't as many big things as there used to be," said Geoff Robison, an ad buyer for Palisades MediaGroup in Santa Monica, California. Its clients include Del Taco Restaurants and HBO, a unit of Time Warner. "If you need to hit a lot of people at once, it's the best way to do that."
With the Super Bowl, the American football championship game, scheduled for Feb. 3 and "Idol," News Corp. has two weapons that competitors lack for weathering the strike. Fox is likely to overtake CBS, NBC and ABC in the weekly race for prime-time ratings earlier than in previous years, the News Corp. president, Peter Chernin, said last week. "We have good ratings," said Chernin, speaking at a Citigroup conference. "We expect to win the broadcast market by a wider margin this year."
"Idol" ad prices are the highest of any regularly scheduled TV show, said Brad Adgate, research director for the New York advertising agency Horizon Media. Episodes, which run from 30 minutes to two hours, generate about $19 million in ad sales for each hour, he said. Fox pays licensing and royalty fees.
A Fox spokesman, Scott Grogin, declined to comment on revenue and profit from the show.
"They've managed to keep the show fresh and people will come back for it," said Chris Marangi, a fund manager at Gamco Investors in Rye, New York, which owns almost 15 million News Corp. shares. "At News Corp., it's an important part of the television business."
The Writers Guild of America forced all the major networks to halt production of scripted shows and offer new reality shows that have not developed a following. "Idol's" success may widen the gap between Fox and other networks, ad buyers said.
"A show like 'American Idol,' a proven ratings winner and buzz builder, is going to benefit," said Peter Gardiner, chief media officer at Deutsch, an ad agency based in New York and owned by Interpublic Group.
Talks between the writers and the studios broke down for the second time in early December when the studios rejected the union's demands for a bigger share of online revenue. The networks were forced to shut down production of shows, air more reruns and change their program schedules.
General Electric's NBC Universal and CBS also shifted series from their cable networks to retain viewers and head off a loss of advertising sales.
"Idol" attracted more than 30 million viewers a night over the past two seasons and helped drive a 49 percent gain in profit at Fox Broadcasting in last year's third quarter ended March 31.
source: http://www.iht.com/articles/2008/01/14/technology/idol.php
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