How American Idol went from 36 million viewers to cancelled

So back in 2006, at the tail end of the American monoculture, more people watched American Idol than voted for the president. One of the hosts was making $36 million a year, Simon Cowell, and a single ad spot cost $750,000. 10 years later, it was dead. And what typically kills TV shows isn't what killed American Idol. The actors didn't get tired and the audience certainly didn't get tired. But hold that thought on what happened. This video is the rise and fall of American Idol. And oh, by the way, uh, I take every single one of these videos and I turn it into a one-page cheat sheet you can download. girdley.com/youtube. And thank you to Curt and Laura, fans from Boulder, Colorado, who sent me this hat to wear today. Thank you, guys. Me and my dermatologist both appreciate it. Oh, and by the way, thanks to David for sponsoring this video. More on them later. The story of American Idol starts back in 2001 in London with a guy who used to be the manager of the Spice Girls. Fuller built a show called Pop Idol for UK TV, and and it was basically a talent show for television, but it wasn't actually a talent show. They had a TV show that was a wild hit, and his company, 19 Entertainment, owned all of the backend. So basically, if somebody wanted to be on the show, they came in and basically got signed to his label, and then they ran the TV show to see if people liked them. It was A/B testing at scale, if you're familiar with that from technology. A/B testing is core of any modern business today. You basically put out two versions of what you think might work, and then you double down on the one that works. And by the way, YouTube is exactly this. People like me are A/B testing formats, different types of stuff, hats all the time to see what changes it. And believe it or not, crazy stuff can change what viewer behavior does and make you either like or dislike a video. In this case, uh, go Rockies. That's the name of the team from the hat, by the way. So that's a joke. A key takeaway from this early version of ITV and something that would happen when it became American Idol later was that to get onto the show, basically it created a version of indentured servitude for these contestants. If they won, they were locked into working with a bunch of different top of stuff that Simon Cowell owned, including, well, 19 Entertainment. Before American Idol, it used to be that A&R guys and people in suits in LA decided what kind of stuff the industry was going to take a bet on. And here Cowell had created a moment where basically the television was going to be the free vehicle to test artists before anybody even had to invest anything in them. It was absolute genius. And because America is the largest market in the world, Fuller wanted to bring it to the United States. He pitched to every single network and they all passed. But it turns out there's a huge benefit to having kids. And Fox was run by a guy named Rupert Murdoch. He had a daughter named Elizabeth, and she was younger, and she had seen the show in the UK, and she insisted her dad bring it to the United States. So reluctantly put it in the summer 2002 session, uh, basically the graveyard when nobody's watching TV because most Americans are outside. Premiere got nearly 10 million viewers. The finale, 22.8 million viewers. It was perfect dramatic TV. It was basically like Survivor, the reality show, with music. And that produced a star that has lasted since then, Kelly Clarkson. From a summer throwaway show, American Idol finished as the number one show in the 18 to 49 demographic in the United States. It was a runaway hit. What was genius about the model of American Idol, and what most people don't get, is that it was a two-way marketplace. They made money coming and going. On the front end, in those initial seasons, they would sign deals with folks like Coca-Cola, who paid $35 million to have their name on the cups that sat in front of the judges. But the real business was the back end. It was the leverage that 19 Entertainment had over all the artists who would come in and try to be on the show. To get on, you would often sign contracts that locked you into these one-sided deals where 19 was taking all the economics. They would get a cut of records, touring, merchandise, often for years, if not decades into the future. But one-sided that as the decade went on, folks like Kelly Clarkson had to actually sue, and she did in 2007, to get out of the contract. It was so bad that at night she would go home crying. Suttle IV eventually was done but not reported publicly, and rumors are she paid a steep price to get out of the deal. In 2005, seeing all this money flow in, Fuller saw an opportunity and he sold 19 Entertainment, the guys that own the entire back-end deals with all these people showing up as contestants, for $200 million, and he kept producing the show. Season 6 would come in around 2008 and the viewership would peak at 30.6 million people. Just incredible. Season 5's finale would have 36 million people watched the end of it. Started to rival the Super Bowl, just with microphones. In the 2008 Democratic primary, 36 million people would vote. 97 million people would vote for the finale of American Idol. It's insane. I'm gonna buy an ad in the finale that season, it would cost you $750,000, and Fox was reportedly making 50% of that as profit every 30 seconds. Crazy. You voted, you tend to do it by text message. Uh, they did a deal with AT&T where American Idol got paid for every text message that was sent to vote. Just crazy. Money was flying in by this point at such a rate that Simon Cowell was signed to a $36 million deal per year to be on the show. Uh, Ryan Seacrest, the host, was reportedly getting paid $15 million a year to record. Carrie Underwood, Daughtry, Adam Lambert— the names go on and on of the people who would win and use American Idol as a platform to launch their music careers. To put that in perspective, if the show itself was a record label, it would be one of the most productive in the history of American MUSIC in just a few years. But this level of popularity started to mask something very interesting. And that very interesting thing would happen in 2009. Most protein bars give you an unfortunate choice. Either they're loaded with sugar and they screw up your macros, or they taste like crap. Bars from David are built differently. They have 150 calories, and the gold ones have 28 grams of protein in them. 150 calories and zero sugar, which actually matters if you're trying to, well, not eat a bunch of sugar and keep your protein levels high. On top of that, they actually taste good. We had some at my house before I went out on this walk. My teenage son said, "These are actually really good. Most protein bars taste like crap, and these David ones actually taste good." That's something. The gold bars have a soft texture with a bit of crunch, and the bronze ones, they're a bit more marshmallowy with some fluff to them. Because they taste good and they do all this stuff right, you can eat them every day, not just when you have to. If you're interested in trying them as well, they're doing a special offer for my viewers. You can buy 4 boxes and get 5th one for free. Just check the QR code on the screen you see here or in the link in the comments below. Oh, and you can also find them at Target or Walmart. Good places. Man, secret about me, I love cookie dough. It's good stuff, only 150 calories. It's good stuff, man. Just shows there's always room to improve stuff, and these guys definitely did. The other thing is a lot of times protein bars, like the ones you get at the gas stations and stuff, they taste like chemicals. And, um, these David ones don't. It tastes like food, which I like. That was season 8, and Adam Lambert, arguably the most talented contestant in years, was beat out by a guy named Chris Allen. Show was getting so big that basically only a very mainstream, widely appealing contestant who could do well on TV would win, and the guy with the better voice and the better talent wasn't winning. And because of that, American Idol started to get boring. And Simon Cowell, look, he's a smart dude. He saw this was happening. In 2010, he decided to walk. So Cowell is walking away from the opportunity to earn $36 million a year to own 100% of a new TV show, X Factor USA. Paula Abdul at the time wants $20 million a year to continue being a co-host. Fox offers her $10 million and she walks and they replace her with, of all people, Ellen DeGeneres, who publicly admits she doesn't know anything about music. Seeing all this money flowing in April 2011, NBC launches The Voice, which is a show much more about the coaches than the contestants. Spinning chairs, X buttons, and lots of drama, more so than American Idol even offered. What Fox hadn't understood was shows like this need a level of consistency between season after season to continue the drama and keep fans engaged. By letting Abdul and Simon Cowell walk and keeping the format stale, well, suddenly they left themselves open to competition. Viewership over those coming years would go down over 80%, and ad rates, they followed. From a peak of $750,000 for a 30-second spot, it eventually went down to $150,000 by the final season. American Idol had been built on a thing called the American monoculture, where basically for a period of time from the '70s into the early 2000s, we're all watching kind of the same TV channels, the same TV shows, the same radio stations, and the same newspapers. But in the early 2000s, that was breaking down because of one thing: the internet. You know, I've done it again. I've gotten so into this video, I forgot where I am, and I'm like trying to figure out which way to go. Oh well. I know at least I go any direction, I'll eventually find civilization. The internet was breaking down the American monoculture, which meant that the idea of these big popular movements where everybody talked about what happened the night before on American Idol at the water cooler, that was ending. American Idol would be the last gasp of a monocultural event, uh, and the like of it would never be seen again because of the end of that. And all because of technology. Kind of crazy how it all ties together. They also started to see something called the American Idol curse, which is the people that won tended not to be successful post-career. Some of those people who won in those final years would never even hear about them anymore. And even some of the early winners like Kelly Clarkson, well, her job, day job now, is having a TV show. And she's pretty good at it. So in May 2015, Fox announced the cancellation of the show. Anonymously, one executive admitted that they should have canceled it 3 years before. They just rode it too long. And come along in 2018, ABC has brought the format. They brought Ryan Seacrest and resuscitated him, brought out all the different kind of folks trying to resuscitate the brand and the show. Perry was brought in, getting paid bucks to do it, trying to make the whole thing happen again. And today it's profitable and it's stable, and about 5 million people watch. And that's a far cry from when more people voted for American Idol than they did for the president. But the good news for ABC is reality TV like this doesn't require much to produce, and it still brings in the viewers. 5 million people are watching, which means it's probably profitable. They're making good money. A lot of lessons from the story of American Idol. And heck, I want to do something fun because it's Friday and I'm wearing a cool hat from a fan. But the most interesting one is what it says about the idea of gatekeepers in our modern world. Gatekeeper is somebody like Simon Cowell or an A&R executive who has to be in the middle to make sure that somebody else can be famous, like a recording artist or something like that. Reality is, over and over in our world, gatekeepers, they have a period in time where they make a lot of money and they're in the middle, and then something happens over and over again where they get kicked out. You can see this pattern with YouTube as well. It used to be somebody like me Before I was able to just go walk in a forest and talk to you about business rises and falls, do it all just with a Steadicam, uh, used to have to go through somebody else to get permission to be on even public access TV. But gatekeepers keep getting killed off one after another. The TV networks don't matter to what I'm doing. We're going to direct-to-consumer with YouTube. The same thing is happening in business everywhere, whether it's with music, with video, with distribution of products. The idea of the gatekeeper, they're going away. And while new gatekeepers do come up from time to time, it's important to remember that the idea of the gatekeeper is always by default one whose time is going to end soon. Like, if you're doing business with a gatekeeper and you aren't interested in continuing to do that long term, or if you're one yourself, the idea that you have to have in today's world is that, well, your time is limited. And American Idol functioned at a time when gatekeepers in the case of music could still exist. And today that world doesn't exist anymore for various reasons, including the death of the American monoculture. All right. That's it for the rise and fall of American Idol. Happy Friday to each of you. If you enjoyed this, it encourages me to make more if you say something nice in the comments. Catch you next time.