‘Idol’ Math: Fewer Viewers, More Cash

“American Idol” has energized hundreds of millions of viewers to vote and bestowed the U.S. with the likes of Kelly Clarkson and Carrie Underwood, not to mention William Hung and Sanjaya Malakar.

So it comes as no surprise that the show that forever changed the landscape of reality television has found a way to defy the laws of physics with revenues that keep going up as ratings go down.

The key has apparently been in the numerous licensing fees, brand extensions and marketing deals the show inked with products ranging from foodstuffs to Apple’s iTunes to AT&T.

Brad Adgate, Sr. VP for research at Horizon Media, told the New York Times “Idol” has completely changed the revenue model for television.

“They are just raking in the money, hand over fist,” Adgate said. “There are certain things that ‘American Idol’ does not do well, like selling DVDs. But the whole industry is moving toward a different model where deciding whether something is a hit or not is not just based on how much you charge for 30 seconds of advertising.”

Executives for “Idol,” which is owned by Simon Fuller’s 19 Entertainment and parent company CKX, say they’ve taken a cue from pro sports organizations like the National Football League.

“We have learned the lessons of the sports leagues in that they have all these ancillary revenue streams,” CKX President and CEO Robert F.X. Sillerman told the Times. “And frankly, we’re just beginning.”

Besides the licensing and merchandising, those ancillary revenues reportedly include royalties from ticket sales for performances by “Idol” contestants.