LOS ANGELES (Reuters) - Fox television heads into the year’s biggest advertisement sales period later this month with questions about the future of its ratings champ “American Idol,” but a better economy, among several factors, should buoy the show’s ad revenue, experts said.
Viewership has slipped on the singing contest, and its hold on the No. 1 position in U.S. TV is being challenged. Fan buzz among America’s music-loving youth seems to have shifted to musical “Glee,” and at the end of this season, top “Idol” star, judge Simon Cowell, will leave the program.
Fox executives told Reuters there will be no announcement on Cowell’s successor when the network presents its 2010-11 programs to advertisers at their annual “upfront” presentation on May 17, nor before the “American Idol” finale on May 26.
But like a struggling contestant getting a “judge’s save” on “Idol,” which gives that person another chance to compete, viewer-based advertising is being propped up by signs of recovery in the ad market, as well as by “Idol‘s” continued dominance over most of its rival TV shows, analysts said.
“I don’t think they will be able to get sky-high prices. But advertisers still need mass audiences, and although the show is getting fewer people watching, they are still getting the biggest crowd you can get,” said Brian Steinberg, TV editor of Advertising Age.
Currently, “Idol” is averaging 24.4 million viewers a show, down 7.5 percent from 26.4 million in 2009 and well off 2006’s high of about 30.8 million.
Executives at Fox, a unit of News Corp. say the slide is not unusual for a 9-year-old program and add that in the 18-49 age group prized by advertisers, it is down just 8 percent and still 72 percent ahead of its nearest rival.
Yet, it is hard to deny “Idol” is seeing its blockbuster status challenged. In February, it was twice beaten by NBC’s Winter Olympics, and recently ABC’s “Dancing With the Stars” has claimed on a couple of nights the title “most-watched TV series” by all viewers.
“Idol” searches on Yahoo.com are off 26 percent compared to the same period in 2009, and 32 per cent off compared to 2008, according to a Yahoo spokeswoman.
“I suspect the quality of the cast this year is making it easier to not consider it appointment viewing anymore,” said Brian Mansfield, who runs USA Today’s Idol Chatter blog.
This season lacks a singer with the charisma of last year’s Adam Lambert, as well as the tension of a tight race like the one between season 7 singers David Cook and David Archuleta.
Steinberg said anecdotal evidence suggests Fox is getting about $1 million for a 30-second ad in this year’s “Idol” finale later this month, down from $1.3 million in 2007.
Fox does not disclose such ad sales figures.
But those ads were sold when the economic outlook was more bleak and advertisers were slashing budgets. Ahead of the upfronts, the sentiment for 2010/2011 seems to be shifting.
The TV networks use the upfronts to present future season’s shows, and immediately afterward, they start negotiating rates with ad buyers for the next 12 months.
Barclays Capital media analyst Anthony DiClemente said in a recent research note that he expected upfront dollar volume for the leading four TV networks to increase 20 percent from 2009 to $8.26 billion, partly due to improved corporate confidence.
Viacom Inc which owns the MTV, Nickelodeon and MTV cable TV channels, last week reported a 3 percent rise in first quarter ad sales worldwide and 1 percent increase in the United States -- the first such improvement in two years.
“What deals Fox cuts with the major ‘Idol’ sponsors (Ford Motor Co, Coca-Cola Co and AT&T) is going to be an indicator of where the show is going to be,” said Bill Carroll, director of programing at marketing group Katz TV.
Also working in Fox’s favor is that the networks generally sell upfront ads in bundles of programs, and this May Fox also will be selling ads for “Glee.” The show has almost doubled its audience to more than 13 million this season and is generating the kind of buzz once enjoyed by “Idol.”
“‘Glee’ could end up being a similar phenomenon to ‘Idol’. Looking at the signs right now, and how Fox is handling it, that potential is there,” said David Scardino, entertainment specialist at ad agency RPA.
Yet, even as the ad market appears to be rebounding, “Idol” faces the departure of popular British judge Cowell, who is quitting to launch his own TV show on Fox in late 2011.
“Simon is irreplaceable. He is the star of the show. So you don’t try to fill his shoes, you go in another direction.” said Mike Darnell, president of alternative programing at Fox. But he declined to say what that direction will be.
Fox rivals include NBC, which is operated by General Electric Co., ABC, owned by The Walt Disney Co, and CBS, a unit of CBS Corp.
Editing by Bob Tourtellotte and Dana Ford