The Fuller File

[Snowdrop]

It is - that ties in with the idea of SF wanting to have his own download company - which would mean 'his' company would have song-writers, producers, performers and now distributers squished under the one umbrella.

[Khelda]

I have to say that the last sentence is very much douple dutch for me.

[Maggiemags]

"Business Speak" Does Snowdrop's translation help?

[Khelda]

Yes, Snowdrop posted same time as me, and on reading it it makes a bit more sense. Thanks.

[Snowdrop]

Clearly I should write for the FT!

[Maggiemags]

Clearly

Very interesting article from USA Today.com. lots of facts and figures. It's long, but, i think, worth having.

'American Idol' zooms from hit show to massive business

By David Lieberman, USA TODAY

LOS ANGELES — Anyone who remembers The Monkees or The Partridge Family can appreciate how tough it is to build a sturdy business from a prime-time TV program that's also designed to sell music.

People watch for a few years and snap up recordings, T-shirts and lunchboxes. Then tastes change, or someone's ego gets too big, and the enterprise collapses.

But don't tell that to the executives behind the hottest show on TV: American Idol. They've launched an ambitious campaign to turn Fox's talent contest, now in its fourth season, into a diversified money machine that will last years.

"Everyone sees this now as a long-term situation," says the show's creator, British music impresario Simon Fuller. "I'm on the cutting edge of entertainment and how you exploit it."

Idol is the undisputed champion of television. The Tuesday show, when contestants perform, ranks No. 1 in prime time with an average of 28.9 million viewers. The Wednesday show, when the contestant who got the fewest call-in votes is eliminated, is No. 3 (just behind CBS' CSI) with 25.6 million viewers. And that has led to a financial windfall.

Idol and the singers it has made hitmakers — including first-season winner Kelly Clarkson, second-season winner Ruben Studdard and runner-up Clay Aiken, and third-season winner Fantasia Barrino — generated more than $900 million last year in sales of TV ads, albums, merchandise and concert tickets, USA TODAY estimates.

The Idol business runs through several companies that are privately held or are so large that they don't have to break results down by specific projects. It's also hard to separate American Idol, which airs in 85 countries, from the 33 other iterations of this global phenomenon, including Canadian Idol, Indian Idol and Britain's Pop Idol— the show that started it all.

American Idol's co-producers, Fuller's 19 Entertainment and FremantleMedia North America — a subsidiary of German media conglomerate Bertelsmann — got serious about long-term business plans last summer. They were determined to defy expectations that audiences would tire of Idol.

Now, Tom Gutteridge, who resigned last week as CEO of FremantleMedia North America, says, "Idol is part of American culture, like McDonald's or Starbucks. If the brand is carefully handled, there's no reason it can't last indefinitely."

The producers tweaked the format of the show by allowing older singers to compete and shaving the series this season to 37 hours from last season's 42 1/2. They also made the production slicker by beefing up the backup band. The result: Total viewers are up 8% vs. last season.

"There's not another show I can point to that has had growth in the fourth season. It's really remarkable," says Gail Berman, who until last week was head of entertainment at Fox and is negotiating to join Paramount Pictures.

Even Idol's caustic judge, Simon Cowell, a music executive who helped develop the show and gets a royalty on every sale of an Idol-related recording worldwide, is buoyant — with a caveat: "If we all decide to stay together and make a commitment to keep this show successful, it could run another 10 to 20 years."

Still, it's hard to turn Idol into Idol Inc., uniting a diverse collection of companies and people behind a long-term strategy.

And Fuller's an unlikely candidate to lead that. Considered Britain's most powerful and controversial music manager since Brian Epstein handled The Beatles, Fuller made his fortune handling trendy, short-lived acts such as the Spice Girls and S Club 7. He'll continue to oversee all things Idol as part of a six-year contract with Sports Entertainment Enterprises, run by former radio and concert mogul Robert F.X. Sillerman, which just paid about $200 million in stock and cash for 19 Entertainment.

Here's how Idol Inc.'s businesses work, and the challenges ahead:

•The show. This is still the golden goose. Indeed, Fuller says, "American Idol has saved Fox."

Fox should see at least $444 million this season from national ads. It sells about 10 minutes an hour at an average price of about $600,000 per 30-second spot, says Jon Nesvig, president of sales for Fox. By contrast, 30 seconds on the next-most-expensive show, NBC's ER, go for nearly $480,000, trade magazine Advertising Age estimates.

While Fox gets nearly all of the ad sales, it splits with the producers an undisclosed share of the millions the show's main sponsors — Coca-Cola, Cingular and Ford Motor — pay beyond ads to have their products shown and mentioned on the show.

Idol also boosts ratings — and, therefore, ad prices — on programs that Fox promotes during the show and airs after. Also, Fox-owned stations and affiliates have three minutes an hour to sell for local ads.

Yet Idol is a bargain for Fox, which pays 19 Entertainment and Fremantle about $40 million a season — not even a tenth of the national ad sales — for the show, say two executives familiar with the terms.

Fox's relationship with Fremantle and 19 Entertainment has hit some speed bumps. Last year, Fox objected when 19 and Fremantle lobbied to cut this season's run by 51/2 hours, trimming the Wednesday shows.

"We did quite a bit of research with our viewers last year, and the reaction to the padded (Wednesday) results shows was quite poor," says Fremantle's Cecile Frot-Coutaz, one of Idol's four executive producers. They pushed for just half an hour on Wednesdays because, "Ultimately, it's our show. For (Fox), it's like heroin."

Berman says Fox has "the right contractually to do a certain number of hours, and we compromised."

The network might have to compromise again if Cowell demands a big raise to extend his three-year contract that expires after Idol’s next run in 2006.

Considered key to the show's success, he makes about $8 million a season, far more than fellow judges Paula Abdul and Randy Jackson see, according to an executive familiar with the contracts. Cowell declines to discuss his deal. If he walked away, he'd still have plenty to do. He has a record label at Sony BMG Music Entertainment that handles non-Idol performers, and he produces TV shows in Britain and the USA.

"You have to take this business a year at a time," Cowell says. "My priority is my record label. That's more important to me than anything else. The hardest thing when you're on a blockbuster like this is trying to make sure that every entity remains happy equally. It's difficult."

Sillerman says he's confident that Idol would be fine without Cowell. "It's the TV show that is the success," he says. Besides, Fuller "has ideas and embellishments for the show that go into the eighth season. It's a juggernaut."

•The music. There seems to be more harmony among the companies involved in nearly $100 million in sales from recordings by 10 Idol-related singers last year.

The contract contestants sign gives Fuller the right to manage winners' careers for three years and sign them to 19 Entertainment's record label. He also has first dibs on runners-up.

His dual role can only short change performers, say critics such as journalist Eric Olsen, who in a 2002 Slate magazine article called the finalists "Slaves of Celebrity." But Fuller says they get a great deal.

"All their fame originates from American Idol," he says. "When they leave Idol, we represent them with a three-year contract. But we don't double dip. If we own the record rights, we don't act as agents." The company won't disclose its management fee.

CD rights are licensed by 19 Entertainment to Sony BMG, which must handle the winner and has first dibs on others.

"We do the deal with 19, and they do the deal with the artist," says Tom Corson, general manager of Sony BMG's Arista/J Records. In return, the music giant pays a royalty to 19 and Cowell.

To improve the odds for success, Fuller and Cowell persuaded Sony BMG's Clive Davis — who has shepherded artists from Janis Joplin to Alicia Keys — to help shape the singers' careers. "When you've got Clive running the artists' careers, you don't need to get too involved," Cowell says.

The plan is to nurture long-term careers by having them sing nothing too trendy. "We have a pretty common agenda," Corson says of Sony BMG's relationship with Fuller and Cowell. "It's their show and their idea. But they aren't trying to tell us how to make albums for Americans."

•The concerts. Ticket buyers spent more than $28 million last year to see Idol performers, according to Billboard magazine. About 40% came from a 49-show tour by the 2004 finalists. Another 40% came from 30 performances of an Aiken-Clarkson double bill.

The group-show sales were relatively disappointing: an average 5,277 tickets per show vs. 10,025 for a similar 2003 tour. But they remained impressive results for such relative newcomers. "That's unheard of," says Billboard senior touring writer Ray Waddell. "It's revolutionary."

What's more, all the concerts are profitable. Because the singers use one band, the shows are relatively cheap to stage.

•The rest. Consumers spent about $215 million on Idol-licensed products last year, Fremantle estimates. Most of the 35 deals by 19 Entertainment and Fremantle are for typical pop-culture fad products: toys, candies, trading cards, games, a magazine and books. The companies share proceeds after paying the singers a royalty for goods with their images.

Now the companies are hatching more ambitious ideas. Fuller's mulling a theatre show, possibly as a fixture in Las Vegas, in which audience members compete for prizes.

He'd also like to transmit Idol-related shows via the Internet. "There's so much more you could see — rehearsals, choosing what clothes to wear, the tears," he says.

His company doesn't miss a trick. For example, 19 Entertainment trademarked the names "Ruben Studdard" and "Fantasia Barrino" for commercial use, according to U.S. Patent and Trademark Office filings.

This long-term thinking has made makers of sophisticated gadgets feel comfortable gambling on Idol. For example, Digital Blue offers a $100 digital camcorder with software that lets buyers edit videos to appear as though they're Idol contestants.

Expanding the brand, carefully

"American Idol truly is a brand," says Digital Blue CEO Tim Hall. "There could be decades behind a program like this."

Yet 19 Entertainment and Fremantle must weigh each marketing decision carefully. Gutteridge says, "There was a lot of heart searching" when Mattel proposed its new American Idol Barbie. The issue: "Does it skew the brand too young and lose us credibility with 16- to 24-year-olds," the core audience?

The companies are sure to face even more vexing questions as they shift gears and try to persuade people to think of Idol more broadly as a symbol of a young, hip lifestyle. "Our goal is to create a brand that exists outside of the show," says FremantleMedia licensing chief Olivier Gers. "It's all about reinvention and freshness."

To that end, stores carry an Idol line of clothing, jewellery and fragrances. Gers says there's some thought about offering Idol furniture. Such efforts could backfire if overdone, but Fuller says he's on top of that. "I'm the one holding things back," he says. "We've never gone overboard in doing things quickly."

If Idol Inc. defies the odds to stay on top, it can write the playbook on blending TV and record sales into a sustainable business. It also could break a few rules of conglomerate-dominated show business.

"Independent entrepreneurs can set the tone in how the 21st century might look in entertainment," Fuller says. "I don't want to be part of the establishment. I want to create my own establishment."

Again - interesting last sentence

[Guest]

Phew! that made interesting bedtime reading.

Cowell is sure racking in the money isn't he. I can't imagine Idol going on for that long, it sure wouldn't work in this country.

Interesting about the 3 years. Wonder if that was the case for Will and Gareth. There 3 years are up now.

[Khelda]

Very interesting long article, but in a way I am so glad they dont do the same here in UK like in USA with all the brands, the artist images on everything.

But I also thought SC sold his share of his record business? So how come they keep mentioning it still?

[Guest]

Think he's still involed Khelda and has a say.

[Snowdrop]

And he bigs everything he does up.

It is a very interesting final sentence isn't it? I think he definitely has plans to take more control of the industry and become less reliant on other sections, such as record labels or radio stations.

[Maggiemags]

Tiny bit from the BBC's report on the Times Rich List:

... Pop Idol mogul Simon Fuller has seen his wealth plummet from £220m last year to £75m after selling his entertainment company 19 for less than expected, according to the Sunday Times.

[Guest]

That doesn't make sense does it.

[Maggiemags]

Not really, no

[eternal]

Thanks goodness that it looks like Gareth is to be part of Fuller's 'own establishment'.

Thanks for the write up.

[Maggiemags]

Long and interesting article on Brand Republic about sponsors and advertising.

This is the relevant bit for this thread:

The Pop Idol format earned owners 19 Management and Simon Fuller £615m in 2002 alone. Much of that came from its international rights - it has been commissioned in 21 countries to date.

[Guest]

Blomming heck.

[Maggiemags]

Just posting to add a few bits and pieces that I haven't had time to attend to over the past few weeks:

From a site I've never heard of - SFGate.com

'IDOL' MAKERS SUE PERUVIAN 'COPYCAT'

The makers of "Pop Idol" and "American Idol" are suing a Peruvian television company, claiming its show "Superstar" has copied the talent contests.

British music mogul Simon Fuller's 19TV LTD, together with FremantleMedia North America Inc., FremantleMedia Ltd. filed suit against PanAmericana Television S.A. in Miami, Florida's federal court last Wednesday.

The suit alleges PanAmericana's talent show infringes on their copyright and accuses one of the Peruvian judges of imitating "Idol" judge Simon Cowell's caustic put-downs.

The suit wants the PanAmericana production to be banned from broadcasting in America.

From several sources, a long article about that week’s AI which included:

Capitalizing on the show’s popularity, the bimonthly “American Idol: The Magazine” was launched this week, available on newsstands.

“You watch the show, follow your favorites, vote every week and let us know your preference for the next ‘American Idol,’ ” the series creator, Simon Fuller, tells readers in a letter in the magazine.

Included are scorecards that viewers can use to keep track of the show and profiles of the 75 contestants who made it through the selection process to Hollywood.

No news as to how sales are going, but you can bet your bottom dollar that it’s all adding to the coffers

From Fox News:

Exiting 'American Idol' Stars Wising Up?

Mario Vasquez looked like he was going to clean up on "American Idol" this season.

Then last night he announced he was quitting for "personal reasons." ... Speculation that he might not want to sign with the show's 19 Entertainment was scotched by his unofficial publicist, a woman named Hannah who spoke with me last night.

"That would have been great for him," Hannah said.

It's clear that Vasquez didn't think through the ramifications of his decision since, after leaving, he still wanted to remain on good terms with "American Idol."

Maybe the bloom is off the rose now as "American Idol" finalists become savvier about the record business. Automatically becoming part of Simon Fuller's empire and a slave for seven years to his rule may not look as tantalizing as it once did.

It's one thing to become one of Clive Davis' stars like Clay Aiken, Kelly Clarkson, Ruben Studdard or Fantasia Barrino. It's quite another to be a runner-up like Justin Guarini, Tamyra Gray or Diana DeGarmo.

As one publicist said to me last night: "Maybe they're finally wising up."

and, following that, from Contact Music, a strange little site based in Burley in Wharfedale - hardly the entertainment capital of the world - but which pops up fairly regularly on searches:

CLARKSON DUMPS MANAGER FULLER

AMERICAN IDOL's first winner KELLY CLARKSON has ditched British music mogul SIMON FULLER as her manager, claiming he was never really there for her.

The MISS INDEPENDENT singer was picked up by Fuller's 19 Management company upon winning the Idol crown, but now the pair have amicably parted company.

Clarkson says, "(It was) an arranged marriage. He (Fuller) was literally in Timbuktu all the time. I need somebody there for me on a day-to-day basis."

Fuller, the one-time SPICE GIRLS manager and the man behind TV talent shows American and Pop Idol, admits he's sorry to see Clarkson go, but he wishes her well.

He says, "Kelly is an amazing girl who has deservedly enjoyed enormous commercial success."

I haven't seen confirmation of that anywhere else, and she's still listed on 19's website.

From Scotsman.com:

BBC Dance Hit Set for US

By Anita Singh, PA Showbusiness Editor

TV show Strictly Come Dancing is waltzing over to the US, it was announced today.

US network ABC has signed a deal with the BBC to make six episodes of the series.

... Meanwhile Pop Idol supremo Simon Fuller is working on a rival project called Dance Nation, to be broadcast by Fox.

From World Screen News:

Create, 19 Entertainment in Co-Pro

CANNES, April 13: Create Media Ventures has entered into an alliance with 19 Entertainment to develop, manage and produce a new kids' animation series, Hipster Jack.

A musical comedy for the 6 to 11 set, the series features a hippo and a terrier and their madcap adventures on their way to musical stardom. A 26x13-minute series is currently in pre-production.

19 Entertainment, headed by Simon Fuller, said of the alliance, "We are convinced that combining 19's expertise in music-based programming with Create's strength in animated children's properties will lead to a successful and long-term relationship between our two companies."

Create Media Ventures MD Vanessa Chapman said, "This is CMV's first program partnership deal, and we are delighted that it is with such an experienced and internationally renowned entertainment company. This continues our philosophy of working with successful brands, and spearheads the growth of our programming portfolio."

From C21 Media, an international publishing company specialising in worldwide television, media, and associated business information based in London. The article relates principally to a lawsuit rumbling on over some copycat version of The Apprentice - this is the relevant bit:

Apprentice lawsuit steps up a gear

Perhaps a bigger lawsuit exists between Simon Fuller and Simon Cowell over X-Factor's likeness to Pop/American Idol, while RDF and Fox are at legal loggerheads over Wife Swap and Trading Spouses. Another row is taking place between Celador and 12 Yard over You Are What You Eat and Eat Yourself Whole.

C21 again:

Granada's Thacker exits for Idol firm

Granada's head of music programming, Jeff Thacker has become the latest UK television exec to join Simon Fuller's 19TV. He has left the company to work for 19TV's West Coast set-up in the US.

Granada has confirmed that it is not seeking a replacement for Thacker. His move follows the exit of the BBC's former head of drama, Mal Young, quitting the corporation last year to head drama at 19TV, which is currently being bought by Bob Sillerman's CKX for $200m.

Thacker, behind Granada's The Royal Variety Performance, Abbamania and An Audience With…, among others, will be based in LA, producing 19TV's dance-themed American Idol spin-off for Fox. He will team up with his former boss Lythgoe, who is on board the show as exec producer.

Young left the BBC for 19's London offices in September. While at the corporation, he was responsible for programmes including EastEnders, Holby City and Casualty. The move saw him steer 19 into scripted drama formats for both sides of the Atlantic, earning a reported $1m a year.

It's a veritable entertainment industry brain-drain!

[Maggiemags]

And here's an ooooooold article from the Sunday Times that I've just found again:

“Bank your lucky stars”

8/12/02

Fuller is eloquent on why he spends so much of his time now dreaming up new ideas for television programmes - an unusual preoccupation for a pop manager who insists that music is his first love, that he is 'absolutely not motivated by money' and that 'the thing I still get most pleasure from is choosing songs for my artists'. Telly is an essential for a pop svengali nowadays, he believes, because the people who used to play a key supporting role in creating and sustaining the sort of stars he manages have fallen down on the job. At a time when British pop acts fail to penetrate North America, and news of declining music sales across the world prompts regular gloomy headlines in the business press, Fuller names the guilty men. 'Record company executives,' he sighs. 'Don't get me started. They're so lazy and spoilt. They're mainly interested in ego and money, and, worst of all, because they change jobs so often they have no loyalty to their artists. They've slowly been diminishing the value of artists for years by abusing their back catalogues, releasing endless compilations just to get the numbers to add up.' ……………

Most of all, he is dismissive of the pop industry's indifference to what is truly popular. 'You shouldn't be arrogant about music. I've been dubious about A&R people for years, because I am one. For the most part, A&R guys are making records for themselves rather than the public, and when innovation does actually happen it has nothing to do with them. All my ideas are based on what I feel is a gap in the market. I might not like Steps, but I don't criticise 10-year-olds who love them.' ……………

You could call him a workaholic but he says: 'I really love what I do.' …….

For fun, he can always wander into his old friend Pete Evans's office and listen to some new tunes from his stable of songwriters………..

With its range of skills and services overlapping the functions normally carried out separately by pop-management firms, production houses, record labels and business consultancies, 19 is an unusual, as well as an unusually successful, business. ………………….

He likes women because they are 'harder-working and more loyal'. Most of the people who work for 19 turn out to be old friends, former colleagues, or in the case of Kim Fuller - who scripted the Spice Girls movie and is writing one starring the American Idols Kelly and Justin - his brother……………..

'I'm the opposite of a networker. I don't easily trust people,' he says. 'This is all about family and friends.'………….

History also means the big-band music that his father, a big Sinatra fan, used to play on the stereogram at home, and which he sent the UK Pop Idol finalists out to play on tour after the series ended. 'The song and the singer was what it was all about once upon a time, and that's been overlooked recently,' he says. He yearns for the pre-rock era when singers sang, writers wrote, managers managed and so on………….

'The main objection was, "We're not sure public voting will result in the right talent winning.' And I think that's rubbish. People like to paint people such as myself as the ones who create everything, market it and ram it down the public's throat. But that's not the case. I think the public choose a lot more than we like to admit……..

Unusually for someone operating in the shark-infested waters of popular entertainment, Fuller has remarkably few known enemies. None of the record-company executives he professes to despise will say a bad word about him - which perhaps isn't so surprising because when he delivers them a finished recording, by Will Young, Gareth Gates or whomever, he is granting them a licence to print money. The Idols have already sold close to 10m albums and singles in 2002. Aside from that rift with the Spice Girls, he has never fallen out with any of his artists and, tellingly for a man who is now worth well over £100m, nobody has ever tried to sue him. But honourable as he is, there is a steely ruthlessness in Fuller's strategies that clearly makes him a tricky customer

[Guest]

Thanks Maggie, I would like to think his artisits mean something to him.

[Khelda]

Yes I also hope that SF values his artists, but this article also shows that BMG do not. Sad to say.

[Yorksheather]

Thanks Maggie for another interesting Simon Fuller article.I particulary like :

None of the record-company executives he professes to despise will say a bad word about him - which perhaps isn't so surprising because when he delivers them a finished recording, by Will Young, Gareth Gates or whomever, he is granting them a licence to print money. The Idols have already sold close to 10m albums and singles in 2002.

[mary souza]

It has taken a while to get through all the Simon Fuller folio that you have done , Maggiemags. A great job and very informative. Can you tell me it the rumour true that all the artistes on Pop Idol had to sign a contract giving him 50% of their earnings for five years? That's a lot of dosh in anyone's terms.

[maggaz]

Thanks Maggiemags - Obviously a complex character but I hope that he does think a lot of his artisits especially Gareth.

[Maggiemags]

Can you tell me it the rumour true that all the artistes on Pop Idol had to sign a contract giving him 50% of their earnings for five years?

Sorry to take a while to get back to you Mary - been away.

I've never been able to find any details of the PI contracts - although I think 50% would be pretty steep and would seriously doubt it. Most of what I've ever read about SF has shown him to be a pretty fair bloke and he certainly has plenty of other revenue streams from PI

[Yorksheather]

This is from today's Scotman online news ( Sunday 27th November ) another interesting read.

It's never simple when Simons fall out

PAUL STOKES

ONE IS a ruthless, ambitious, super-rich, music industry mogul who is not afraid to trample on other people's feelings to get to the top. The other is a ruthlessly ambitious, super-rich, music industry mogul who is not afraid to trample on other people's feelings to get to the top.

So it should come as little surprise that pop impresarios Simon Fuller and Simon Cowell should find themselves on opposing sides in a £100m legal battle. Yet while they are rivals, they are also old pals and colleagues who have known each other for more than 20 years and who, apparently, remain good friends despite that multi-million pound writ.

At the heart of the legal battle are two rival smash-hit television formats, Pop Idol (and its US cousin American Idol) and The X Factor, both of which are alleged, as the lawyers might say, to be talent shows.

Most right-minded people, on hearing the dispute involved an argument over who really created The X Factor would assume it was a libel case, with each man trying to blame the other for bringing the show to our Saturday night television screens. Of course, it is the other way around, with both Fuller and Cowell claiming it was all their own idea.

In artistic terms, the row could easily be dismissed as two bouffant-haired men arguing over a bunch of coxcombs. However, the tremendous income generated by the 'pop factor' format means it is a lot more serious than that. Both Fuller, who is said to be worth as much as £200m, and Cowell, whose wealth is set at a much more modest £50m, owe most of their fortunes to these television shows.

Fuller, while the wealthier of the pair, is the least well known. His first major foray into the public eye was in 1997 when he was sacked by the Spice Girls, his first major experiment in transforming the mildly talented into international money-making machines.

The precise nature of his role in the girls' rise is indicated by the fact they rejoiced in the nicknames Posh, Ginger, Sporty, Baby and Scary, while he was known in the industry as Svengali Spice.

He began his career running discos before becoming a talent scout for a record company. He made his first million managing the DJ Paul Hardcastle, whose Vietnam-inspired hit '19' is recognised in the names of Fuller's companies 19 Management and 19 TV, which makes Pop Idol and American Idol and is the company suing Cowell.

As well as first hitting the jackpot with the Spice Girls, the band also demonstrated Fuller's early grasp of the fact that music is the least important element of the modern music industry. "With the Spice Girls we created a global entertainment brand," he said, in one of his rare interviews.

Even his friends have described him as "cold and clinical". According to one: "His business is his life, and nothing gets in the way. There is a ruthless element."

He once told another of his creations, the bubblegum pop band S Club7, "I could put cardboard cutouts of you on the stage and it wouldn't make any difference." Those who saw them live might struggle to say whether he ever carried out his threat.

While the rest of the industry fretted about falling CD sales, Fuller went after alternative sources of income. "CD sales are declining, but you can make up for it in merchandising. It occurred to me that music as entertainment is as powerful as it has ever been, but the way people consume it is changing."

The figures certainly back up this analysis; in terms of sales, the pop industry in Britain has been in serious decline for well over a decade. Last year, Swedish DJ Eric Prydz scored a UK number one single with 'Call On Me', despite selling 21,749 copies in one of the weeks he was at the top.

He would barely have reached the top five with that sale in the 1990s or bothered the top 40 in the 1960s. In fact, the combined sale of all top 40 records is now typically about half the 500,000 weekly sales it was a decade ago.

The signs are that even the recently lucrative teenage market is in decline. Only a third of all 12 to 19-year-olds bought a single in 2001 - a proportion that is said to be falling further as a result of the increase in popularity of music downloads.

And yet, despite the decline in CD sales, the pop music industry itself is still incredibly lucrative, partly as a result of cashing in on downloads, TV tie-ins and other innovations. The industry is now worth an estimated £40bn a year worldwide, with British acts accounting for around £8bn of that. The 'pop factor' phenomenon, in fact, has injected a bit of renewed vigour into the UK sector, with Will Young, Gareth Gates and the various other contenders adding millions of sales in the last three years.

It is Fuller who has been credited with driving this part of the evolution of the pop industry, having hit on the idea of creating a brand - as opposed to a band - that would carry on, even as the pop stars it manufactured fell into obscurity, as virtually all the winners of either format eventually have.

At the time it first hit our screens back in 2001, Fuller and Cowell were seen as the co-creators of Pop Idol, and, to a degree, they shared out the spoils. Cowell picked up a big cheque for his high-profile role as the Mr Nasty on the panel of three who judged the would-be idols, endearing himself to the nation with such well-phrased put-downs as "that was distinctly... average".

Cowell also made money from his rights to put out CDs by the winners, who were virtually guaranteed one hit by their television exposure. However, Fuller's ownership of the show itself meant he took the lion's share. A couple of years after launch, Pop Idol alone was earning more for Fuller than his bands, and his television earnings easily outstripped those from traditional music sales.

The genius of the pop factor is its ability to generate millions in revenue from advertising and phone voting lines before even a single CD is sold. The shows are less a talent contest than a drama. Millions tune in for their weekly dose of soap opera as wannabes and never-will-bes have their hopes raised and dashed in the most brutal fashion by the expert panel. It is not to everyone's taste and is especially looked down on by the serious end of the music business. Chris Martin, the Coldplay frontman, once suggested Fuller should be "melted down and turned into glue for destroying people's dreams". But that was before he put out his last album, X and Y.

Last year The X Factor pulled in £50m in advertising revenue for ITV. Two weeks ago the show received a landmark one million phone votes, generating a profit of around £350,000 for the phone companies and the production company.

In the US, Fox is charging a record $700,000 for a 30-second advert in some episodes of American Idol, more even than ABC charges for slots during Desperate Housewives.

It was the sale of the Pop Idol format around the world, and in particular to Rupert Murdoch's Fox channel in the US, which catapulted Fuller into the ranks of the super-rich. Cowell was still doing all right, he transferred his Mr Nasty act to the US, where he is now the best-known Brit in America and earning £4.5m a year for his role, but he got no share from these sales.

So he did the obvious thing. Seeing the big money was in the television show, he set up his own production company, and invented his own format, The X Factor.

There, of course, the similarities with Fuller's Pop Idol obviously ended. For while Pop Idol was a music talent show featuring open auditions, a three-strong judging panel, and public voting to decide the winner, The X Factor was a music talent show featuring open auditions, a three-strong judging panel and public voting to decide the winner. Only the most churlish would see the latter as a copy of the former, Cowell might argue, having branded Fuller's decision to sue him for the theft of his idea as "totally ridiculous".

Cowell might be overstating his defence but industry experts have offered him support. According to Paul Sheehan, head of commercial affairs for the Scottish television company SMG, which recently acquired the rights to one of the old stagers of the TV format world, This Is Your Life, the shows might look and sound the same but it is notoriously difficult, if not impossible, to prove they are the same in a court of law.

"Put simply, you cannot copyright an idea. Copyright only comes into being when the idea is expressed," he says. "You can trademark a show's name, and you can try and trademark some of the elements that go into it. But that is a lot easier for something like a quiz show, like The Weakest Link, which has particular rules, than it is for a simple talent show."

The fact that Pop Idol had three judges, one of whom played the role of baddie, hardly makes it unique. "You need an odd number of judges because you need a casting vote and three is easier to manage than five," says Sheehan. "The good cop, bad cop routine is also common. Anyone who remembers New Faces from the 1970s will recall that Nina Miskow and Tony Hatch played that role for many years."

It is ironic this battle should revolve around two talent shows, as the only other attempt to pursue a similar case through the British courts involved another example of the genre, Hughie Green's Opportunity Knocks. Green sued the New Zealand Broadcasting Corporation after it launched a talent show called, in something of a giveaway, Opportunity Knocks, which featured all the elements of the British show, from its clapometer measuring the studio audience's reaction, to Hughie Green's own catchphrase: "It's make your mind up time folks."

Even so, when courts in England and New Zealand made their minds up, they rejected Green's case. Given that, the most surprising thing is not that shows like Pop Idol get copied, but that anyone bothers to buy one at all. "Everybody in the industry realises that legally there is virtually no protection for these types of television shows, yet the industry is worth billions of dollars a year. It's very difficult to reconcile," says Sheehan. "Really, what is happening is the operation of a huge worldwide gentlemen's agreement without which it would be like the Wild West."

To the disappointment of all those who last week had expected to see Fuller and Cowell slogging it out in front of some judges for a change, those two gentlemen now seem close to their own agreement, out of court and out of sight. Interestingly, the main pressure for a solution appears to have come from America, where the outcome of this row is of vital interest to Murdoch's Fox. Industry insiders in the US point out that Fox is desperate to hang on to American Idol and to Cowell, the one element that makes the show stand out. If the battle had ended badly in court over here, Fox feared that Cowell might quit their show, and take The X Factor over there.

Settling on the steps suits both. First, it will prevent the emergence of any potentially embarrassing revelations about their shows. And second, there has been a distinct lack of the enmity normally expected in such high-profile, and high-stakes, cases. Both men may sport super-size egos, but it looks as if they have kept them out of this battle.

It has remained strictly business, never personal. According to Cowell, they have carried on talking all through the spat, just as he has carried on working for Fuller's American Idol. "I didn't take it personally when he hit us with the lawsuit," he said. "He was protecting the show, which he's entitled to do."

It is still a shame that the row never made it into court, or that the pair did not launch their own new show in which to air their spat, a kind of Law Idol. Millions of us would have tuned in to watch them slug it out for the title of creator of The X Factor, and then hit the phones to vote on who we felt really was to blame - at a cost of 35p a call, of course.