More profit for 'Idol' -- and rivals can only watch

Fox' ratings monster is commanding ever-higher TV commercial rates that some analysts predict will boost ad revenue for the News Corp.-owned network 20% to $900 million.

Television's undefeated champion, "American Idol," returns this week and the talent contest is expected to be more popular -- and profitable -- than ever.

The Fox show begins its seventh season Tuesday against the walking wounded. As the strike by the Writers Guild of America grinds into its 11th week, rival networks are scrambling to stay alive.

ABC, CBS and NBC are loathe to pit their strongest contenders opposite "Idol," fearful of the juggernaut show that last year drew an average 30 million viewers an episode.

"You have the No. 1 program in television for the last four years, and now it's going up against even weaker competition," said Ray Dundas, a senior vice president at the ad-buying firm Initiative, which represents such clients as Home Depot, Bayer, Coors and Hyundai Kia. " 'Idol' is going to do very, very well."

Indeed, Hollywood's self-immolation sparked by the writer's strike is benefiting "American Idol" and Fox. The network's profit will increase because of its ability to command pricier ad rates. Higher ratings for "Idol" means more viewers will see promotions for Fox's other programs. Fox parent News Corp. acknowledges that, at least in the short term, the strike boosts its bottom line -- leading some writers to believe that the financial lift is encouraging company executives to hang tough against them in the labor dispute.

Even before the strike, "Idol" was one of the most lucrative shows in television, generating hundreds of millions of dollars in profit for the network and its co-producers, FremantleMedia and 19 Entertainment. Fox declines to disclose how much it earns from the show, but according to TNS Media Intelligence, which tracks ad spending, "Idol" last year collected $810 million in revenue, up 39% from 2006. Some analysts estimates the show's ad revenue could soar 20% this year.

Fox initially sold commercials in this year's "Idol" for as much as $750,000 per 30-second spot. As the writer's strike has dragged on, advertisers have been shelling out $1 million or more for a single commercial that would run as the show's grand finale draws closer, according to people familiar with the situation.

No other series on television commands such premiums. Commercial spots in original episodes of other highly rated shows, including CBS' "Survivor" and ABC's "Grey's Anatomy," sell for $250,000 to $450,000.


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