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The show’s big winners

'Idol' boosting profile of prod'n houses

For FremantleMedia and 19 Entertainment, history could be divided into two epochs: Before “Idol” and After “Idol.”

Neither company had much of a profile in the U.S. until 2002, when “American Idol” hit U.S. shores and opened the door to American primetime.

London-based music-management firm 19 Entertainment was a vehicle for the packaging skills of impresario Simon Fuller that manufactured pop acts like Spice Girls and S Club 7. It had one employee in the U.S.

FremantleMedia, the London-based production arm of Bertelsmann’s RTL Group, was one of the largest producers of TV in the world, but had never had a hit in the U.S. Its presence was limited to the syndication business, where it peddled evergreen formats like “Family Feud” and “The Price Is Right,” both of which it acquired rather than originated.

Fuller initially produced the “Pop Idol” concept for Talkback Thames, a division of Fremantle. Now 19 owns two-thirds of the format; Fremantle owns one-third and has exclusive right to sell the show abroad.

When Fuller shopped the “Idol” concept in the U.S., it was on the verge of becoming a hit in the U.K., but it was unclear whether the idea would travel. The “Pop Idol” format had been sold in just two markets outside Britain: Poland and South Africa.

“There were very serious doubts,” says Cecile Frot-Coutaz, CEO of FremantleMedia North America, recalling how the producers initially had trouble hiring a showrunner.

Today the “Idol” juggernaut is a diamond-studded annuity that generates in excess of $1 billion a year worldwide through advertising, license fees, sponsorships, merchandising, telephone voting, record sales and touring.

The two production companies have already reaped hundreds of millions from the “Idol” format, having retained an unusually large stake in the myriad revenue streams the show generates in the U.S., its largest market.

Fremantle and 19 split the proceeds of just about every other revenue stream associated with the show beyond TV advertising, which goes exclusively to Fox.

In addition to the producer’s fee, Fremantle and 19 split the proceeds of sponsors such as Coca-Cola and Ford, all merchandising of the “Idol” brand, two-thirds of the net revenue generated from the web, and 50% of revenues from cellular phone calls and instant messaging.

Today, 34 local versions of “Idol” air in 110 countries; some nations, such as Canada, air both a local edition and “American Idol” simultaneously. In December Fox renewed the deal through 2009, with an option to produce two more seasons.

Six months before “Idol” sold in the U.S., FremantleMedia had been attempting to transform its U.S. operation into a producer of original TV skeins, as it is in other countries.

FremantleMedia was created in 2001 after the merger of Pearson Television (which distributed “Baywatch” worldwide) and CLT-Ufa to create RTL, Europe’s biggest TV conglom. Unlike Endemol, the other European purveyor of so-called “reality” TV formats, FremantleMedia derives half its revenue from European dramas.

But its strength in the U.S. has been the import and export of gameshow and reality formats. It acquired the international rights to “The Apprentice” from Mark Burnett in 2004 and has imported the cable skeins “How Clean Is Your House,” “Distraction” and “Property Ladder.”

Frot-Coutaz, who came to FremantleMedia from Pearson, was elevated last July to CEO of the North America operation in large part due to her work as an exec producer on the show.

Likewise, “Idol” helped transform 19 Entertainment from a music management firm into a growing multimedia conglom with merchandising and TV divisions.

The “Idol” juggernaut attracted former SFX Entertainment chief Robert F.X. Sillerman, who acquired 19 Entertainment for $200 million last year and is using it to develop a TV production arm of CKX, which also owns the right to merchandise Elvis Presley and Muhammad Ali.

19 Entertainment has a second show on Fox, “So You Think You Can Dance.”

“We transformed into a full-blown entertainment company on the back of ‘Idol,’ ” says 19 Entertainment VP Tom Ennis.

The U.S. is by far “Idol’s” most durable and profitable market. In the fifth season of its run, the producers are trying to keep the show vibrant and the franchise growing, but without killing the goose that laid the golden egg.

Fremantle sends traveling producers around the world to ensure that local versions hew to the brand’s identity.

“My duty is to keep the show around as long as possible, and that means saying no to potential exploitations for the show that are too downmarket,” explains the French-born Frot-Coutaz.

Fox gets a lot of credit for restricting the skein to a single competition per year. In contrast, ABC and NBC flogged “Who Wants to Be a Millionaire” and “The Apprentice” into submission.

Initially, Fox had the option of ordering two competitions a year but both Fremantle and 19 argued against it.

Fremantle was unsure it had the manpower to pull two editions in one year, and believed the show should be preserved as “event entertainment.”

And 19 didn’t want a second season to interfere with its efforts to market the winner of the first competition, who would then be releasing a CD and going out on tour.

With fifth-season ratings up double digits from last year, production execs have stopped predicting when it might fade. “Big Brother,” the first so-called reality format to become an international hit, began in the U.K. in 1999. “Survivor” is in its seventh year and its 12th edition.

“Reality is too young a genre to make a meaningful prediction,” says Frot-Coutaz.

Not only that, but “Idol” appears to still have some room to grow internationally. The show is in its fourth season in France and just finished its third in Germany.

After defying the expectations so many times, there’s little point in trying to predict the show’s staying power.

“We can’t kid ourselves,” says Frot-Coutaz. “There are only so many ‘Idols’ and maybe only one in our lifetime.”

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