Fox's expensive new televised talent show "X Factor," starring former American Idol judge Simon Cowell, is drawing smaller audiences than Mr. Cowell had projected, pushing ad prices down and causing the network to compensate advertisers with extra commercial time on the show, according to people familiar with the situation.
Since premiering in mid-September, the show has drawn 12.2 million viewers on average—well below the 20 million that Mr. Cowell said over the summer was necessary for the show not to be a "disappointment."
That compares with the average of 25.2 million people that watched "American Idol" in its 10th season, according to Nielsen.
"It's not a bad show, it's just not performing in line with such high expectations," says Brad Adgate, a Horizon Media analyst.
Fox invested heavily in "X Factor," including $20 million to launch and market the show. The network topped a $250 million offer from NBC for Mr. Cowell to produce and star in the show, the Journal has previously reported.
Although "X Factor" has fallen short in some respects, the show has still helped Fox turn around its flagging fall line-up, something it has struggled to do for years. "X Factor" has lifted Fox's Thursday viewership by 59% and enabled the network to win the night among viewers 18 years old to 49 years old for the first time in network history. The overall number of viewers tuning into Fox during the first month of the television season is 18% higher than it was in the first month of 2010, according to Nielsen.
It's commonplace for networks to compensate advertisers for lower-than-expected ratings with extra commercial time. Among the advertisers that Fox is compensating has been "X Factor's" biggest sponsor, PepsiCo, according to a person familiar with the matter. A spokeswoman for PepsiCo said "we're pleased with the total value we're extracting from our partnership."
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