todd55devoe's blog: "american idol"

Filed under: Forecasts, Consumer experience, News Corp'B' (NWS), CKX Inc (CKXE)

Over 100,000 people tried out for American Idol, which kicked off its sixth season Tuesday night on News Corporation's (NYSE: NWS) Fox Network. There's a way you can ride Idol's popularity -- by buying stock in CKX Entertainment (NASDAQ: CKXE). I enjoyed watching Judge Jewel and Shakira-look-alike, Perla Menses, in Minneapolis, but I'll skip the stock.

MSNBC estimates that Idol is a $2.5 billion franchise with at least five revenue streams, including:

• Text messaging -- In 2006, 64 million votes were cast for favored contestants using AT&T Inc.'s (NYSE: T) Cingular cell phones;
• Product placement -- In 2006, advertisers paid 4,086 times to have their products featured on Idol;
• Licensing -- Through Freemantle Media, which owns the licensing rights to Idol, 40 licenses have already been issued, and Freemantle is working on deals for Idol ice cream, Idol Monopoly and an Idol theme park attraction;
• Online ads -- McDonald's Corporation (NYSE: MCD) and MasterCard Inc. (NYSE: MA) are buying advertisements to accompany an online version of Idol that will be streamed over the Internet at the end of the TV broadcast; and
• Written word -- Heart Full of Soul: An Inspirational Memoir About Finding Your Voice and Finding Your Way, by 2006 winner Taylor Hicks is due out on April 3rd. Or you can subscribe to American Idol: The Magazine.

But the public company with the biggest share of the Idol franchise is CKX. CKXE owns the company that produces Idol, 19 Entertainment, as well as the rights to the names, images and likenesses of Muhammad Ali and Elvis Presley (as well as the operation of Graceland) and a firm that manages Robin Williams, Billy Crystal and Woody Allen.

Continue reading Should you invest in American Idol?