Fox: Turning a Hit into a Home Run
By Ronald Grover
Unless you were in a cave the first week of September, you know that the star of the moment is former Texas cocktail waitress Kelly Clarkson. The twentysomething songbird was crowned Sept. 4 as the American Idol during the final installment of Fox TV's white-hot talent-search series of the same name.
Since then, the doe-eyed victor has been everywhere -- chatting with Jay Leno, getting gushy with Katie Couric. Next up: a single, a CD, a concert tour, maybe even a movie.
The talented Clarkson isn't the real winner here. No, I'm not suggesting that electric-haired runner-up Justin Guarini was robbed. The real winner is the Fox network. Ratings for American Idol's 25 episodes, dating back to June 11, were spectacular. The average audience was 12.6 million, according to the network.
As Clarkson and Guarini sweated out the verdict, they did so along with 22.5 million viewers -- or 39% of all couch potatoes in the U.S. Those are major-league numbers, especially for summer. Idol hit all the right notes for the network, which saw its summer ratings zoom for the first time in years.
EYEBALLS VS. DOLLARS.
Numbers like that justify the big bucks Fox got for ads on the final episode, along with the estimated $3 million that Ford and Coca-Cola each paid for the rights to sponsor the show's three-month season. Word has it that Fox was getting close to $450,000 per spot during the latter half of the two-hour finale. The impressive ratings also explain why Fox used 4 of the 26 spots in the last 60 minutes to promote its own shows for the upcoming season. That's right: It turned down close to $2 million in cold cash for the chance to toot its own horn.
Foregoing cash in hand for the possibility of gains down the road might seem foolhardy in a year when advertising revenues have taken such a hit, but this long-term thinking is a shrewd strategy. In 2001, Fox's ratings tumbled 6% overall, and 21% in the 18-to-49 age demographic that advertisers crave. Fox needs viewers more acutely than dollars.
The fact that Rupert Murdoch's crew is giving its lineup a major overhaul means Fox understands the need for long-term planning. For the coming season, 63% of its programming will be new, according to Chicago-based advertising and media-buying outfit Starcom Entertainment. One thing working in Fox's favor is that its core shows are still strong enough to anchor nights -- Boston Public on Mondays, The Bernie Mac Show on Wednesdays, and The Simpsons and Malcolm in the Middle on Sunday. It still has some gaping holes, however, after axing both Ally McBeal and X-Files last season.
Using the summer's biggest hit as a launch pad for its new shows won't hurt. That was part of the strategy at CBS when it introduced CSI -- promoting the heck out of it when Survivor made its debut to hotter-than-the-beach ratings two summers ago. And that's what ABC didn't do enough of when Regis Philbin and his matching shirts and ties were all the rage a couple of years back.
Instead of using Who Wants to Be a Millionaire to gain traction for new shows, Disney-owned ABC concentrated on cashing in on the stratospheric ad prices it was getting while the rest of the network listed. ABC's idea of the best way to exploit Millionaire's popularity was to air it several times a week, accelerating the pace at which the viewing public tired of a show that had already crested.
As soon as Fox realized it had a hit in American Idol, it flooded the airwaves with promos when the contestants finished warbling. It looks like that strategy may pay off. By mid-August, Lieberman Research Worldwide found that the awareness for two of Fox's new shows -- Cedric the Entertainer and John Doe -- had jumped, according to a report obtained by trade publication Electronic Media. More than 25% of the audience -- a number considered very strong -- wanted to see both shows.
GUYS' NIGHT OUT.
Media buyers are also enthusiastic about Cedric and John Doe, along with girls club, a new David E. Kelley legal drama starring Beverly Hills, 90210 alum Kathleen Robertson as one of three female attorneys. It will be paired with Kelley's Boston Public in what looks to be a strong combo. As for girls, it ended up getting its share of Idol promos after Fox found out that the contest show appealed heavily to women between 18 and 49, a demographic it usually doesn't attract.
Cedric, created by the folks behind early Fox hit In Living Color, is part of the network's assault on NBC's Wednesday-night stranglehold. It will follow The Bernie Mac Show, and they could prove a formidable pair. In the prime 30-second spot right before Kelly and Justin heard the verdict -- and with more than one-third of U.S. viewers glued to the set -- Fox served up a promo for its new Wednesday-night lineup.
John Doe's chances are considered more problematic. The drama about a supersmart amnesiac who helps the Seattle police is being counted on to keep X-File fans around on Friday nights. Problem is, that's when many members of the network's core audience of younger guys are out bar-hopping. Plus, John Doe is being paired with another newcomer, the space cowboy show Firefly.
Just how Fox performs this season will depend, ultimately, on the shows it puts on the screen. But thanks to Idol having been a well-promoted hit in the first place, the new entries have a fighting chance. Kelly Clarkson has given David Kelley, Cedric, et al a strong opening act. It will be up to the new shows to prove they're worth sticking around for.
And what about American Idol's future? Well, another round will be starting sometime in early 2003. It may be a one-hit wonder or a genuine franchise. By then, Fox will know if its strategy paid off. It's not as much of a cliff-hanger as Kelly vs. Justin, but to Fox execs, a whole lot more important.
Grover is Los Angeles bureau chief for BusinessWeek. Follow his weekly Power Lunch column, only on BusinessWeek Online
Edited by Patricia O'Connell