Twenty-First Century Fox Cancels American Idol - Analyst Blog

Twenty-First Century Fox, Inc' s FOXA flagship show, American Idol , that heralded the era of reality TV, will finally go off air after its 15th season next January.

Rising production costs, high pay checks of the celebrity judges, combined with falling ratings forced Rupert Murdoch led 21st Century Fox to discontinue American Idol . Apparently, host Ryan Seacrest and Jennifer Lopez get around $15 million per season. Also, competition from other shows like America's Got Talent and The Voice made things difficult for American Idol.

As per sources, last season, the network finished fourth, both in terms of total viewers and the important 18-49 demography, concluding one of its worst possible seasons ever. Cancellation of American Idol will pave way for new programming which comprises nine new shows for 2015-16, including the hit urban drama series, Empire that premiered in January, thereby to improve viewership.

American Idol, in its heydays, was one of the dominant programs on television with ratings as high as 30 million viewers per episode. Based on a British show Pop Idol , it became a multibillion asset for 21st Century Fox and helped to post record quarterly profits over a decade.

However, of late, the show has failed to resonate with audience, especially the 18-49 demography, as reflected in falling viewer ratings. As per sources, American Idol 's 2014 finale had only about 10.6 million viewers whereas its rival show The Voice aired on NBC had 11.6 million viewers for the finale. Moreover, in the current season, it is yet to reach 10 million viewers.

Falling ratings of the show has lead to loss of much valuable advertising revenues for the company, with big sponsors like The Coca-Cola Company KO , Ford Motor Co. F and AT&T, Inc. T moving away.

One of the many reasons for the show's falling popularity is the departure of its original judge panel -Simon Cowell, Paula Abdul and Randy Jackson. Simon Cowell's scathing criticism of the participants and banter aimed at Seacrest and Abdul were the things that pulled in viewers.

While Cowell quit the show in 2010, the other two judges, Abdul and Jackson left in 2009 and 2014, respectively. After this the company has brought in several high profile celebrities like Ellen DeGeneres, Steve Tyler, Nicki Minaj, and Mariah Carey, all of whom failed to take the ratings higher.

The final season, which is deemed to a be a 'long celebratory event', will retain host Ryan Seacrest as well as the current judge panel - Jennifer Lopez, Keith Urban and Harry Connick Jr.

Currently, 21st Century Fox carries a Zacks Rank #3 (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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