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American
Idol
is already
conservatively valued at $2.5 billion in its incarnation as a television
franchise. It already brings in $500 million a year in TV advertising, plus
another $30 - $50 million in sponsorship packages, music sales, live tours
etc. The US
magazine "Advertising Age"
has reported that the owner of the already hugely valuable American Idol format is looking to add yet further
value to it. Freemantle Media is trying to eke even more revenue out of
what may already be the most lucrative multimedia property of all time.
On the back of the huge
viewing figures for the US television show, along with three core partners
integrated into the content, American
Idol is
now seeking new opportunities by streaming the entire programme on AmericanIdol.com after it is
aired on television. Apparently, sponsors of the website already include
McDonalds and Mastercard. Last season in the US American Idol attracted 570 million votes and 65
million text messages. Sponsors (Ford Motor Company, Coca-Cola and Cingular
Wireless) are working ever harder to increase the revenue from American Idol and Ford plans
contests which will give regular viewers the opportunity to appear in music
videos featuring the final contestants.
All this is good news
for Simon Cowell, because in addition to the value of the US franchise (in which he has a
30% interest), its British cousin X-Factor
has been valued at £300 million. The valuation company Brand Finances
estimates this is the value of the X-Factor
franchise taking into account voting revenue, merchandising, TV advertising
and music sales. Simon Cowell's company, Syco, jointly produces X-Factor with Thames Television (owned
by Freemantle Media) and shares its profits.
There is no UK or US statute or case yet which
specifically grants legal protection to a television format. The first
specific recognition by any court of the existence of the format in a
broadcast programme (in this case it was a radio programme) was in 2001 by
the Supreme Court of Hungary. Since then decisions by courts in a number of
countries including Holland and Brazil
have confirmed that in appropriate circumstances a court will afford
protection to television formats.
However, these are
staggering sums of money to ascribe to a format particularly in the US,
where in the litigation brought by the rights owners of Survivor against ITV.com, the
rights owners of I'm a Celebrity:
Get Me Out of Here!, Judge Preska dismissed the claim
saying: "the evolution of TV
shows ... is a continual process involving borrowing liberally from
what has gone before". She clearly recognised that all new
formats owe something at least to their predecessors, and to succeed in a
claim for infringement you must establish copying rather than mere
inspiration.
Organisations such as
the International Format Lawyers Association (www.ifla.tv)
and the Format Recognition and Protection Association (www.frapa.org)
are committed to protecting the rights in programmes which are original and
have been developed carefully by substantial investment of time and
expertise. Our view is that in the right circumstances both a US or a UK court would protect an
original programme format.
However, while a
definitive case is still awaited in the UK or US (the principal sources
of successful formats worldwide), these sums are still remarkably high
valuations for a species of intellectual property which lacks legal
certainty. Until then great care should be taken to ensure that if there is
a dispute, your format will enjoy the best chance of protection (see www.ifla.tv
to obtain details of the IFLA seminar and guide How to Protect Your Format).
Jonathan
Coad
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