'Idol' judges
Reuters file
Coca-Cola has paid an estimated $15 million a year for the privilege of placing its beverage cups in front of 'American Idol' judges Simon Cowell, left, Paula Abdul and Randy Jackson — and the millions who watch them.
By
msnbc.com contributor
updated 5/24/2006 3:58:11 PM ET 2006-05-24T19:58:11

Who will be singing a happy tune after "American Idol" finishes its fifth season Wednesday? A simpler question might be: Who won't be?

"American Idol's" impact is far-reaching. It could be argued that no television program in U.S. history — from "The Honeymooners" to "Seinfeld" — has spread its riches to such a diverse group.

Among the winners:

News Corp. — The parent company of the Fox Network is ecstatic that "American Idol" is attracting 30 million viewers per show. Driven partly by the success of "Idol" in reaching younger viewers coveted by marketers, Fox ad revenue is expected to rise 12 percent to about $1.8 billion this year, according to a report by Merrill Lynch analyst Jessica Reif Cohen. Meanwhile ABC ad revenues are projected to rise 7 percent and CBS 1 percent, while NBC drops about 3 percent, according to Cohen. (MSNBC.com is a joint venture of NBC Universal and Microsoft.)

Wednesday's season finale is expected to bring in about $1.3 million for a 30-second spot, compared with about $560,000 for a typical ad on a hit show like "Desperate Housewives."

Since last fall News Corp. stock has arisen from a slumber to rise more than 30 percent to almost $20 a share, near a 52-week high. Of the top 10 shows in the first week of the crucial May sweeps, “American Idol” was No. 1 — and No. 2, based on the Tuesday and Wednesday episodes, ahead of No. 3, CBS' "CSI: Crime Scene Investigation." Though it is hard to measure, Fox's other shows no doubt have benefited from their promotion during the widely watched "American Idol" episodes.

Music industry — The days of Michael Jackson and Madonna — when record companies could hitch their wagon to a universally popular star — seem to be on the wane. Enter “American Idol.” It has helped propel the careers of not only pop stars but also country stars like Carrie Underwood, whose “Some Hearts” compact disc has sold millions of copies.

Not only that, the Fox show has helped give new life to aging pop giants like Queen and Rod Stewart, who have enjoyed soaring album sales after "Idol" appearances.

"What a deal for the record companies," said Derek Reisfield, a consultant who advised Paula Abdul when the show was launching and who has also advised EMI Music. "I can't imagine what it would cost to buy the time on TV with the reach 'American Idol' is getting. The great ratings and demographics are hard to come by.”

U.S. companies — Specifically Cingular, Coke and Ford. The advent of Tivo has left advertisers struggling to get their message across, especially to the key market of viewers aged 18-49. Viewers can't avoid the product placements in “American Idol,” from the Coke cups strategically placed in front of judges to the use of Cingular Wireless for audience votes. (More than 40 million Cingular text messages relating to "American Idol" were sent last season.)

Ford Motor Co., in attempt to bolster its down-in-the-dumps business, is turning to one-time Idol star Kelly Clarkson and counting on her singing voice to captivate viewers once again, this time to promote the automaker's new slogan, “Bold Moves.”

For sponsors, return on investment can be tough to quantify. But Coke is trying. According to Brandweek magazine, the Atlanta beverage giant hired McKinsey & Co. to measure the success of its American Idol partnership, a deal believed to cost $15 million annually.

Contestants — Five years ago, there were a host of names unknown to the American public that are now familiar, including Clarkson, Ruben Studdard, Clay Aiken, Fantasia and Bo Bice, all careers manufactured by appearances on “American Idol.”

Kelly Clarkson, the original Idol winner who is best known for the song “Since U Been Gone,” has sold hundreds of thousand of albums since 2002 and hauled in two Grammys this year. But you don’t have to win to get a big payoff from a stint on “American Idol,” as Taylor Hicks or Katharine McPhee will find out Wednesday night. Even those who are voted off the reality show — a humiliating experience in front of millions of viewers — often strike fat contracts with record companies.

"I am sure they — all contestants — have generated over $100 million in sales,” Reisfield said. “All the contestants who make it into the core group — by that I mean the last 5-6 shows — they get incredible exposure and the chance to capitalize on that exposure. Most have been struggling, and this experience gives them a leg up in breaking out of the pack.”

Judges and host — Simon Cowell, the co-creator of “American Idol” and in many ways the heart of the show with his searing critiques of talent (or lack thereof), is worth more than $80 million by some estimates thanks to the show's success and is signed on through 2010.

His entertainment empire is becoming so vast that he is just as likely to be written about in Fortune magazine as in People. Former pop star Paula Abdul has been given a second life as a popular judge with the show, and Randy Jackson — a well-regarded music industry executive who had been unknown outside those circles — has gained immeasurable fame thanks to “American Idol.”

As for Ryan Seacrest, the 'Idol' host has signed a $21 million deal with E!, started his own clothing line and hosts a nationally syndicated radio show, according to The New York Times. Not bad for a 31-year-old.

For everyone from once-obscure singers to giant corporations, “American Idol” is coining money. Even Simon Cowell can’t find anything to criticize in that effort.

© 2013 msnbc.com.  Reprints

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.71%
$30K home equity loan FICO 5.26%
$75K home equity loan FICO 4.70%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.42%
13.42%
Cash Back Cards 17.94%
17.94%
Rewards Cards 17.14%
17.14%
Source: Bankrate.com