The 120 million American Idol-associated albums sold have transformed TV into the holy grail for the majors, making the upcoming contest hugely important for the music biz.


The Contest, Coming to Fox Next Year, Will Be an All-Out War, Fought on the U.S. Airwaves, the Opposing Forces Commanded by Brits

Simon Fuller, Lucian Grainge and Jimmy Iovine are girding themselves to take on Simon Cowell and Rob Stringer in a prime-time battle, in front of tens of millions of eyes and ears. American Idol vs. The X Factor (a.k.a. Simon vs. Simon) will be a high-stakes game for the collective hearts and minds of American pop culture. The 120 million American Idol-associated albums sold have transformed TV into the holy grail for the majors, making the upcoming contest hugely important for the music biz… In 2000, while Grainge was running UMG’s U.K. operations, he helped pioneer the music-contest TV format when he and partner Nigel Lythgoe (now back as the executive producer of Idol), launched the first show of its kind with Popstars (ITV). After Popstars ended in 2002, Grainge was involved with the long-running Star Academy (BBC). At the time, Grainge missed out on American Idol; instead, BMG secured the worldwide music rights to Fuller’s Pop Idol franchise (the show debuted in the U.K. in 2001 and in the U.S. the following year). But when that deal—which had gone to Sony via the BMG joint venture and eventual acquisition—expired earlier this year, Grainge was ready with his checkbook. The pick-up went swiftly and smoothly, in part because he and Fuller had been colleagues and business associates for 30 years. As for Sony Music, some contend the company chose not to attempt to re-up with the show, reportedly having concluded that Idol was getting too toasty to make another sizable monetary commitment, and believing the potential upside wasn’t worth the risk. Others insist that Sony Music ruler Rolf Schmidt-Holtz fought to retain the show until the bitter end. There was also reportedly a clause in Fuller’s deal allowing him to terminate the show's contract with Sony at any point if Cowell left, which, in fact, he did. In any case, Columbia/ Epic chief Stringer cast his lot with The X Factor and Cowell, who was already in the fold via Sony’s deal with his Syco label, which yielded the worldwide hit acts Il Divo and Susan Boyle. Stringer doubled down by betting on the left-field hit Glee, which is the G Factor, so to speak, in the TV music wars, having quickly become the TV mother lode for record sales. The three albums and two EPs released thus far have collectively sold 2.75 million units while yielding 9.45 million track sales. An LP and two EPs are scheduled for Q4 release… What makes this contest especially fascinating is the fact that Fuller, Cowell, Grainge and Stringer have so much in common. The four Brits, all around 50, climbed their way through the ranks of the music business in close proximity to each other, working similar jobs in the London offices of various labels, trolling for talent and making their bones during the last 20 years. Their relationships are close and for the most part highly competitive. Grainge and Stringer, for example, are facing off as U.S.-based company heads, just as they did back in London while heading the U.K. divisions of Universal and Columbia, respectively. At the time, Grainge was Britain’s dominant music executive, crushing the competition and pumping up UMG’s marketshare to 37.1% in 2008… Meanwhile, the longtime rivalry between the headline-grabbing Cowell and the spotlight-avoiding Fuller heated up even as the two were in business together on American Idol, with Cowell and BMG’s Syco holding the music rights, while Fuller’s 19 Entertainment had the far more lucrative TV rights. In 2004, the same year The X Factor replaced Pop Idol on the U.K. network ITV in a big win for Cowell, Fuller went so far as to sue his business associate, accusing Cowell of ripping off Idol with The X Factor; the two settled out of court a year later. As part of the settlement, Fuller got an executive producer credit on The X Factor, Cowell agreed to stay on American Idol for four more years and Syco, by then owned by Sony BMG, retained the music rights for the same four-year term. Cowell was also prevented from competing directly with Fuller in the U.S., but that restriction was lifted earlier this year, and Cowell wasted no time in preparing for the 2011 launch of The X Factor in the U.S…. While the two Simons made their names and fortunes in the TV medium, their backgrounds are music-intensive. The son of an EMI executive, Cowell got his start in that company’s mailroom before moving into A&R and publishing. He left EMI in the early ’80s to form E&S Music and then Fanfare Records, which had some hits via the Stock Aitken Waterman production team. After Fanfare was sold to BMG, Cowell racked up a series of novelty hits (including the WWF Wrestlers, the Teletubbies and the Mighty Morphin Power Rangers) at his own BMG-funded S-Records before forming Syco in 2002, the same year he made his debut as an American Idol judge. Between these two ventures, he became very wealthy indeed, earning nearly $70 million in 2008 from his Idol remuneration alone, according to Forbes. Additionally, Cowell reportedly pocketed £58 million from Sony when it bought out his Ronagold Ltd. and Simco Ltd., the joint venture company set up to manage revenues from his TV-launched pop stars, among them Boyle (launched on Britain’s Got Talent) and Leona Lewis (from The X Factor). Last year, before opting to bring The X Factor to the U.S., Cowell had demanded a raise to £100 million a year to stay with Idol, which would have made him the highest paid star in TV history. It also would’ve eased Cowell’s discomfort of having to “spend four months of every year making his rival richer” (as the Daily Mail put it)... Fuller also gained his music business credentials as an A&R rep, working at Chrysalis, both the pubco and the label, in the early ’80s. He got his first hit in 1983 when he picked up the U.K. rights for Madonna’s “Holiday,” and two years later he scored with a single from a homegrown act, Paul Hardcastle’s “19,” which inspired him to name his management company 19 Entertainment. He had great success in that realm with artists ranging from Annie Lennox (with whom Grainge goes back even further, having signed Eurythmics to their RCA publishing deal) to S Club 7 and the Spice Girls. During the last decade, Fuller diversified his empire, signing such high-profile figures as the Beckhams, supermodel Claudia Schiffer and tennis player Andy Murray, while also creating another hit Fox series in So You Think You Can Dance. In 2002, 19 Entertainment inked 19-year-old Amy Winehouse to a management deal, produced her first album, 2003’s Frank, and brought her to Grainge’s UMG U.K. In other words, Fuller hasn’t lost his touch—or the inclination to do business with his longtime cohort, as Grainge’s recent signing of Lennox further demonstrates… Fuller is rumored to have hated Season Nine of American Idol and welcomes the injection of fresh ideas presumably coming from Iovine and his posse, believing the show can experience a renaissance if cleverly remounted along more contemporary lines. The money is nothing to sneeze at, either—the UMG pact could be worth as much as $1 billion, according to media speculation… As the Simons and their forces roll out the heavy artillery, the L.A. Reid subplot continues to develop, with Fuller and Cowell both reportedly looking seriously at the IDJ leader, who may well decide the grass is greener outside of major labeldom should he get a firm offer from either Simon. If he gets offers from both, it then gets extremely interesting. Would he stay in the UMG fold by throwing his lot with Idol, or would he opt for a fresh start with the debuting X Factor? Most of those who’ve seen Reid in the act of wooing an artist he covets—or taking to task a roster artist whose latest work has failed to meet his standards of commercial excellence—are convinced that he’d be a terrifically engaging and telegenic personality, in what could be the role of a lifetime for the multitalented veteran… All of this leads to the ultimate question: Can Fuller, Grainge and Iovine keep the long-running Idol relevant and competitive from their strategic positions behind the scenes in the coming showdown with Cowell, who will become both the brains and the face of The X Factor? In short, has Stringer bet on the right Simon? Only time will tell… Meanwhile, there’s plenty of action around the Big Four. Grainge continues to put his imprint on UMG, holding budget meetings this week at his headquarters in L.A. According to insiders, each domestic label is getting its own meeting, as are the heads of key international operations… Sony Music remains in an unsettled state, with Schmidt-Holtz’s status still officially up in the air, though his departure now appears to be only a matter of time, while the identity of his successor remains a guessing game. The only names that have thus far come up in media reports are those of Stringer and RCA/Jive topper Barry Weiss… With half of this week’s Top 10 albums, WMG appears to be awakening after several sleepy quarters under commander Lyor Cohen, who has attempted to put new life into Warner Bros. Records via just-named Chairman Rob Cavallo and Co-Presidents Todd Moscowitz and Livia Tortella… As for EMI, Roger Faxon has just made his first key personnel move, naming EMI Music Publishing mainstay Dan McCarroll as head of A&R for the record company. As for the rest of the A&R staff, with Nick Gatfield out, what does the future hold for Gatfield hire and current Virgin Records head Rob Stevenson? Gatfield is believed to have met with other labels, but a rumored reunion with former boss Grainge at UMG seems unlikely, given the wealth of A&R gunslingers already in the Universal fold. As terminations continue at EMI this week, many dealmakers believe Faxon is actually preparing to sell off or outsource parts of the company, potentially including certain territories, Mexico and Korea said to be among them, as well as the Christian and Latin divisions. Distribution talks with Sony and/or UMG are also likely to begin again. Speaking of possible sell-offs, is Edgar Bronfman Jr. back in the mix, with WMG’s financial outlook having just been upgraded by Fitch Ratings?… Names in the Rumor Mill: Doug Morris, Roger Ames, Sonny Takhar, Irving Azoff, Tommy Mottola, Scott Sperling, Howard Stringer and Big Jon Platt.

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