Why a Falling 'Idol' Is Bad for Business on Madison Ave

Aging Show Is Losing Ratings Steam, but There's No Other Titan to Replace It

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"American Idol" is falling, and advertisers desperately need the giant to get back up.

Fox's veteran talent show has been tops on TV for its past eight seasons and traditionally commanded the highest price for a 30-second ad spot. But much like "Idol" judge Steven Tyler, the show is starting to show gray in its 11th season. As of Feb. 26, more viewers in advertisers' coveted 18-to-49 demographic tuned into NBC's "The Voice" (thanks to a post-Super Bowl launch), while 18-to-49 ratings for ABC's "Modern Family" and CBS's "The Big Bang Theory" are approaching those of "Idol."

Though still a force, "Idol" is no longer the highest-priced show on network TV -- it now shares that title with "Sunday Night Football."

Show is starting to show gray in its 11th season.
Show is starting to show gray in its 11th season.

A weakening "Idol" is bad news for Madison Avenue. There simply is no alternative with similar reach and ratings . If "Idol" were to go away, advertisers would be forced to spread their dollars around more. It might also rejigger the investments they make with each network, because "Idol" advertisers often get their ads in the show as part of a larger Fox package.

"I don't think it's as simple as figuring out what other programs are the alternative," said Christine Fuller, managing director-media investment at WPP's MediaCom.

"Idol" ratings declines this year are bigger than what Fox executives anticipated, said one executive familiar with the network. Even Chase Carey, second-in-command of Fox parent News Corp., has taken notice, admitting at a recent investor conference that "the ratings aren't where we would have hoped." The program is in need of "fresh energy," the deputy chairman and president of News Corp. added.

Softer ratings could give buyers a negotiating tool during the upfronts, when TV networks hope to sell most of their ad inventory for the coming fall season. If the "Idol" ratings situation becomes more pronounced, advertisers may push back against the rates Fox seeks for the show and "look at the overall Fox mix," said Ms. Fuller. "They still are the No. 1 show in their time period on Wednesday night, but not by the margin they have been in the past."

On the other hand, there are few other places for "Idol" advertisers to go, just as there wouldn't have been much of an alternative for marketers reliant on football had there been an NFL strike.  

Revitalizing the program is therefore crucial for both Fox and marketers. Fox runs "Idol" about three hours a week for half the season; the show accounts for about 20% of its 15 prime-time hours each week January through May. While "The X Factor" will return this fall and is viewed as a sort of heir apparent to "Idol," the new show's ratings are not close to the 20 million mark.

Advertisers, meanwhile, need "Idol" because only a handful of traditional prime-time shows on broadcast TV command such attention in this age of splintering audiences and new media-consumption devices. "Idol" charter advertiser AT&T declined to comment while another, Coca-Cola, said in a statement, "We continue to believe in the show as a great way to communicate with our core consumers."

Knives have been out for "Idol" for years. Last year, CBS tested a dance competition featuring Paula Abdul on Wednesdays opposite "Idol" (it failed to catch on). And NBC's decision to hold off on a fall launch for the second season of "The Voice" and run it with "Idol" in the second half of the season speaks to an increasing vulnerability for the older program.

Fox still thinks "Idol" has something to offer. The show's true power won't be known until the final third of the season, when audiences grow more enthusiastic about particular finalists. And "Idol," which on a combined basis attracts 19.8 million viewers, isn't primed to vanish (The last show to draw that number of viewers in its 11th season was CBS's "Murder She Wrote" nearly 20 years ago.)

There is no lack of ideas for moving "Idol" forward. Ms. Fuller would like to see a better rapport among the judges and suggested the practice of using "auditions to showcase people with not as much talent" may have run its course. And at Fox, the network is not complacent about its flagship show.

Even so, "Idol" once walked alone among TV shows. Now it has company.

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