'Idol' Juggernaut Passes $2.5 Billion in Value; Keeps Expanding

Get Ready for 'Idol' Candy, Ice Cream, Theme-Park Attraction and Parallel Online Show Broadcasts

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NEW YORK (AdAge.com) -- Are you ready for "Idol" chocolate bars, "Idol" ice cream and "Idol" Monopoly games? What about an "Idol" theme-park attraction and a "Sims"-style virtual "Idol" world that
Already vying for the title of the most lucrative multimedia property of all time, 'American Idol' is involved in a whirlwind of negotiations to further expand itself. ALSO: Vote and comment in our online poll on this issue -- see right rail.
Already vying for the title of the most lucrative multimedia property of all time, 'American Idol' is involved in a whirlwind of negotiations to further expand itself. ALSO: Vote and comment in our online poll on this issue -- see right rail.
will give contestants makeovers before letting them stroll down a red carpet in front of the paparazzi and sing?

More revenue
All of the above are either done deals or in stages of negotiation and are part of a push by "American Idol" owner Fremantle Media to wring even more revenue out of what already may be the most lucrative multimedia property of all time.

Conservatively valued at $2.5 billion as a franchise, the "American Idol" empire already brings in $500 million a year in TV ad dollars, including a number of $30 million to $50 million core sponsorship packages, music sales, live tours -- read: more sponsorship revenue as well as ticket sales -- and an explosion of products from 40 licensees.

Entire program online
But that's just the beginning. Despite the TV show being crammed with ads from 137 marketers in the past two years -- along with three core partners integrated into the content -- Fremantle Media, the rights holder to "Idol," is making room for new ad opportunities by streaming the entire program at AmericanIdol.com after it airs. Already signed on to support the website are marketers including McDonald's and MasterCard.

Keith Hindle, Fremantle Media Licensing Worldwide exec VP-integrated marketing and interactive-Americas, said the goal is to make "American Idol," which hits the Fox airwaves Jan. 16, a year-round phenomenon. "The top line about everything this season is the desire for interactivity," he said. "We are trying to kick-start that across all elements of the show. Last season, 'Idol' attracted 570 million votes, 65 million text messages. That's a ridiculous amount of interactivity. We are taking that concept that people want to participate and are strengthening that into other things."

Sponsors Ford Motor Co., Coca-Cola Co. and Cingular Wireless are working harder to squeeze more juice from the "Idol" juggernaut for which they paid $30 million to $50 million. Ford plans a contest that will give regular viewers a chance to appear in the music videos featuring final contestants. In addition to Coca-Cola's Red Room and its ubiquitous cups -- the most widely seen product placement on TV, according to Nielsen Monitor Plus -- Coke will sponsor a promotion that invites viewers to submit questions for contestants through MyCokeRewards.com.

Cellphone downloads
Also, fans for the first time will be able to download specific performances, thanks to Cingular, which will make clips from the show available on cellphones once viewers in Hawaii have finished watching the show.

Fremantle owns AmericanIdol.com, which is built, hosted and sold by Fox through a revenue-sharing agreement. Fremantle, approached by a major web portal last year about hosting the "Idol" website, came close to yanking the property from Fox entirely, said one executive close to the company, noting that the company felt that Fox hadn't sufficiently capitalized on a web presence until season five.

The Fox-hosted site attracted 40 million unique visitors last season. Among Fremantle's licensing partners on the site is Star Style, which allows viewers to buy the outfits worn by the finalists.

There will be no escaping "Idol" on store shelves, either. Mr. Hindle and his boss, Olivier Gers, general manager, Fremantle Media Licensing, have seen to that. In addition to Coke's major commitment to promote the show through its cans, Nestle will distribute 79 million branded candy bars along with a competition to win a seat at the finals. Dreyer's is introducing ice-cream flavors tied to the show with names such as "Hollywood Cheesecake" and "Drumstick Diva."

32,000 illegal YouTube Clips
While Fremantle appears to be cleaning up -- pretax revenue in the first half of '06 was up 75%, according to parent German media consortium RTL -- it's being careful to keep control of its golden goose. When executives last checked, YouTube was carrying some 32,000 "Idol" clips -- all illegal.

The marketer payoff is obvious. The finale attracted 22.7 million viewers in season one, but that audience had grown to a stunning 36.3 million for the season-five finale -- an enormous achievement in today's media-fractured world.

Moreover, "Idol" has managed to corner another valuable-but-elusive metric: engagement. "They're doing much more than a show. They've been using other media to expand the engagement process," said Robert Passikoff, founder of Brand Keys.

Still, "Idol" expansion can be a headache for marketers, albeit one they are willing to suffer. "There is an inordinate amount of extensions around the show," said an executive at a major agency. "Because the show has evolved, there are now more opportunities. That's where it starts to get sticky; you've got competitive issues. But you deal with that on every big property."
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