MUMBAI: Fox, 19 Entertainment and record label Sony BMG have reached an agreement that will guarantee at least four, and as many as six, more seasons of the music based reality show American Idol.
American Idol 5 will commence airing in January 2006. In India the local version of the show Indian Idol is in its second season on Sony.
Reportedly, the deal was possible because Simon Fuller who created American Idol and the show's host Simon Cowell were able to settle their differences. In the UK, Cowell produced a show X Factor that Fuller argued was a clone of American Idol. The two of them now say that they are friends and in fact the dispute helped strengthen their relationship.
As part of the deal, Fox announced that it had reached an agreement with Cowell that will keep the acerbic judge on the show for at least five more seasons.
According to a Securities and Exchange Commission (SEC) filing by CKX - the American Idol renewal calls for Fox to pay 19 Entertainment and Fremantle an additional $18 million (on top of the show's regular seven-figure-per-episode license fee) for the roughly 40 episodes of next year's season. In 2007, the premium Fox will pay climbs to $21.5 million. This rises to $35.5 million for the 2011 season should the show run that long.
.CKX had acquired 19 Entertainment and its rights to American Idol earlier this year. It is hoping to capitalise on the increase in the demand for globally recognised entertainment properties such as American Idol, resulting from advances in personalised distribution methods that allow consumers to exert greater control over the timing and method of content consumption.
CKX believes that the best evidence of this trend are the new agreements with Fox and Sony BMG and CKX's increased share of the revenue produced by American Idol. CXK chairman and CEO Robert F.X. Sillerman said, "We believe that the significant increase in our economic share from American Idol under these new agreements, and the unlimited potential offered by partnering with Fox on internet rights and wireless platforms shows the increasing value of content in a world of newly developing and more personalised methods of entertainment distribution.
"These deals substantiate everything we believed when we chose to focus on acquiring premier content and partnering with its creators. With this important step behind us, we can now accelerate our plans for additional growth from our existing properties and through additional partnerships and acquisitions."
Fuller who besides creating American Idol is also 19 Entertainment CEO said "We are extremely excited that Fox has recognised the phenomenon of American Idol by providing the unprecedented guarantee of at least four and up to six more seasons of the show.
"We look forward to working with Fox and our partners at Fremantle to build upon the success of the show and expand the American Idol content and brand into the evolving worlds of internet and mobile content distribution. Simon Cowell has been a key component in the incredible success of American Idol and I am delighted to have reached an agreemen that will see this relationship continue and grow over future years."
19 Entertainment has confirmed other elements of the deal. They include -
-- The increased license fee per season from Fox is reflective of the previously announced increases in ad rates for the coming season. Additionally, 19 Entertainment will receive an annual payment tied to its recording agreement with Sony BMG.
-- In addition to guaranteeing at least four more seasons, the agreement provides for an automatic renewal for up to two additional seasons upon the show achieving certain readily obtainable minimum ratings in the fourth and potential fifth years of the deal.
-- Commencing with American Idol 5, Fox will at its own expense, build and host www.americanidol.com. This is expected to become the show's official website. 19 Entertainment, FremantleMedia and Fox will work together to develop content for the website, and will share the revenue generated under an agreed upon formula. 19 Entertainment and FremantleMedia, however, retain the right to develop and offer premium services on the site.
-- 19 Entertainment and FremantleMedia have granted to Fox certain wireless telephony rights, including show-related or inspired ringtones, realtones and video footage. The parties will share the revenue generated from exploitation of these rights under an agreed upon formula.
-- Fox has agreed to pick-up at least two original shows produced jointly by 19 Entertainment and FremantleMedia over the next five years. This is in addition to Fox's recent decision to renew 19 Entertainment's show So You Think You Can Dance?.
-- 19 Entertainment and FremantleMedia will produce certain agreed upon shoulder programming to be broadcast on the Fox Reality Channel and the TV Guide channel.
-- Sony BMG will continue as the designated record label for the winning American Idol contestants. 19 Entertainment will receive from Sony BMG a larger percentage of the revenue from the sales of recorded music from future American Idol artists.
