Simon's Back!
Topic Strategic and Marketing Planning
Key Words Cannibalization, differential competitive advantage, new product development, test marketing
InfoTrac Reference A143115943
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News Story 

Uncertainty filled the air in early 2006 as reality-TV fans contemplated life without their favorite "American Idol" judge, Simon Cowell. The famously acerbic talent mogul staged a contract holdout prior to the No. 1 reality series' fifth season, setting the blogosphere afire with rampant speculation over Idol's future.

But worries turned to elation when headlines announced that Cowell and Fox reached a deal: The British-born A&R rep-turned TV icon agreed to five additional years of Idol, guaranteeing many more episodes of abuse towards hapless amateurs in search of pop stardom. Negotiations quickly paid off for Fox, as season five earned record ratings and attracted about 30 million viewers per broadcast.

Although Cowell is best known for hurling brash insults at talentless Mariah wannabes, the lifelong music executive also produces a slew of entertainment ventures that some have called Simon, Inc. "American Inventor" and "Duets" are his, as are Cowell-produced musical groups Il Divo and Westlife. Moreover, numerous Simon-inspired productions dissed by Fox have made it to other networks here and in England.

But despite the new flood of reality shows to hit the airwaves in 2006, fans aren't likely to drift far from the show that started it all. Idol is crushing offerings by competing networks, and as long as Judge Simon stays on board to issue a steady stream of insults and visible disgust week after week, America's favorite talent contest is certain to maintain its spot high atop the television ratings charts.

Questions
1.

What is cannibalization, and how does it relate to Fox's decision to turn away many of Simon Cowell's new reality shows?

2.

How does "American Idol" generate revenues??

Source Bill Carter, "Here Comes the Judge," The New York Times, March 12, 2006 pAR1(L)
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