Australian Idol: A Licence to Print Money (Unless you win it)

by Charles Miller on November 9, 2003

Between broadcaster Channel 10, producers FremantleMedia/Grundy, record label BMG Australia and concept licensors 19, there must be a lot of people wringing their hands with glee. There's a lot of money to be made here, and with any luck, a bare minimum is going to be wasted on the “talent”

Firstly, there's all the advertising revenue. Idol is rating its arse off, and you can bet that Ten are charging an arm and a leg for any spots during the shows. Meanwhile, Fremantle Media are crowing over all the product-licensing revenue they're pulling in.

Then, there's the phone-in revenue. This is what's so amusing about Idol. The viewers have to put their hands in their pockets on top of what 10 are raking in from the advertisers to pay for their own “free-to-air” television. And boy are they encouraged to pay. “Vote often!” they're told. “Keep voting again and again!” Keep that money pouring in.

You could almost excuse this behaviour on Big Brother. The production cost of that show: keeping the house running 24/7, producing four or five hours of TV a week from the footage, and then handing $500,000 over to the winner (well, half to the winner, half to the ATO) would at least have made the show an expensive earner. Do you really think that Idol's weekly shows would be costing as much to produce as, say, the average episode of “Hey Hey It's Saturday”?

And then there's the prize. What exactly is the winner getting? Cash? A new car? Well, no. They're getting a recording contract. They're getting... the chance to work for a living. And we know from Popstars before it, that the career of an Australian TV talent-quest winner is short and unrewarding. The potential winner of Australian Idol would be better off walking out now and getting a job as a temp typist. They'll probably have more to show out of that in a year's time.

They're getting the wonderful opportunity for some short-lived fame, and the chance to make even more money for somebody else.

The single's going to enter the charts at number one. We know that. But having heard the single tonight, and having heard both finalists sing it, it's obvious that it's going to tank very quickly after that debut. It's behind the times. It's a foot-dragging ballad, that fits about as well into the upbeat Rap and R&B-laden Top 40 as it would if the winner were to record “Tie a Yellow Ribbon”.

Any album will do worse. Neither of the finalists have the charisma, passion or even the talent to hold up an entire album. They'll vanish into obscurity the same way as all the Popstars vanished before them.

Which isn't to say that BMG won't make money from the single or the album. It's impossible not to make money from a sure-fire number one. They just won't make money for the artist.

You see, when you make a CD, the artist has to pay back any advance (which includes the cost of the CD's production), and half the cost of making the video out of their royalties. Making sufficient royalties from the record to pay back the production costs is called ‘recouping’. It's only after you've recouped that you start to see any money from the record yourself.

Many people confuse recouping with the record making a profit. The record companies like to encourage this myth. Actually, the artist's royalties (especially the fraction of royalties given to artist who did not write the song) are a small percentage of the CD's profits. By the time the artist recoups, the record company has made their investment back many times over.

And then there's the merchandise. The Australian Idol will be property. They're the product of a world-wide brand, and that brand's not owned by them. It's owned by 19, the Idol show creators, and FremantleMedia, the licensee/producer. It's all built on top of exploiting the alleged talents of the contestants, but none of them, or the winner, will see any of it.

The system is rigged. Channel 10 make money. FremantleMedia/Grundy make money. 19 make money. BMG make money. The “talent”, the people the audience actually tune in every week to watch, have little chance of winning more than the joy of a few months fame, a few more months of shopping centre appearances, and then a realisation that they're yesterday's news, and the bills aren't getting paid.

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