Fat lady hasn't sung for 'American Idol'

NEW YORK -- Never mind the 10% drop this season in the average audience for American Idol.

Executives at the collection of disparate businesses around Fox's hit talent show are singing a happy tune as they head toward its finale this week.

A boost in airtime this season and the addition of iTunes as a fourth core sponsor (with Coca-Cola, AT&T and Ford) have helped to make the business "stronger than it has ever been," says Robert F.X. Sillerman, chief executive of CKX, the firm that co-owns the franchise with FremantleMedia.

His company is the best proxy for the health of what might be called Idol Inc.: CKX subsidiary 19 Entertainment — run by Idol creator Simon Fuller — collects license fees from Fox, signs recording deals with the winner and any other top-50 contestant it wants, manages their careers, handles the annual summer concert tour and licenses the brand.

CKX reported last week that its Idol-related operating income in the first quarter rose 63%, vs. the same period last year, to $24 million on revenue of $28.8 million, up 42%.

The main reason for the increase: Fox ordered 53 hours of Idol, up four hours from 2007. Although that's "a great business decision for Fox," Sillerman says, it may have diluted ratings for each show.

Next year will be different. CKX must agree to any network order beyond 45 hours, and Sillerman says, "You'll see slightly fewer (hours). We don't want to overexpose it. We want the pent-up excitement."

Ratings also may have been hurt by the absence of drama, apart from the competition itself.

"There was no controversy about why is somebody in this competition or deep background stories about them," he says.

Sillerman says he's "sure" that his company will sign record deals with semifinalists David Archuleta and David Cook — and may pick up others.

"There's a thought that there may be a (Chris) Daughtry lurking in the weeds in this year's crop, someone who was voted off a little bit early who might have some value."