Q&A: Simon Cowell on His Search for 'X Factor' Talent and What He Thinks of 'American Idol'

He also reacts to producers who say they're "glad" he isn't on "Idol" anymore; shares his thoughts on Mark Burnett's new singing competition, "The Voice"; and explains why the winner of "X Factor" will receive a whopping $5 million in cash.

Ten years after helping launch American Idol into a national pastime, Simon Cowell is again playing the role of underdog. He's back auditioning talent for a largely unknown singing competition -- although this time, when The X Factor premieres on Fox this fall, it will come with immense hype and expectations. Cowell, 51, spoke with Hollywood Reporter editor at large Kim Masters for a segment on her KCRW radio show, The Business. An edited transcript follows:

Tell me what you learned from launching Idol that you might be putting into practice now with The X Factor?
Simon Cowell: When we launched the show, which was literally 10 years ago, I was doing exactly the same thing. I was talking to people, talking up the show, which nobody knew anything about. This is when we were trying to get people to audition in the first place and praying that it was going to work and that people would like it. But until people actually showed up, we didn't know whether the show was going to work or not. And it's the same principal now. No matter what your ambitions are for one of these shows, it absolutely depends on who the contestants are. If they're all useless and boring, you haven't got a show.
The expectations for Idol were nothing, and it turned out rather well. The expectations for X Factor are higher, so what do you do?
Cowell: Just keep doing what I'm doing, which is don't believe the hype, assume you've still got to get the message out to people -- maybe those who would normally not enter a show like this. You've got to start from the absolute basics because we haven't filmed a second yet of this new show. I know what it turned into in the U.K. It turned into a really successful, fun show, and I hope the same thing can happen in America. But like I said, it's the contestants who made it good in England.
Idol ratings have held up quite well, and the talent is awfully good this year. Is it overstating it to say you are worried about talent not knowing what X Factor is and not turning out the way they do for Idolnow?
Cowell: I said from the beginning I was going to put my money where my mouth is. So we put up, in addition to a recording contract, $5 million to the winner of this show, as a statement to say that I actually did believe that we could find somebody who would become a world star. Because we don't give out recording contracts like that at Sony any longer.
Is that $5 million cash guaranteed?
Cowell: It's $5 million cash guaranteed. Whether you sell one record or 10 million records, you get $5 million.
I'm tuning up right now. Working on my vocals...
Cowell: It's worth it, right?
How do you cut through all this clutter of singing competitions? Mark Burnett is launching The Voice on NBC; everybody's gunning to reach Death Star status like Idol.
Cowell: This has been happening for years. Mark did that same thing when he launched Rockstar, or whatever the show was called. I've seen a lot of shows come and go and I can now just to stick to what we do best, which is, I have very good producers working for me. And I always make a show that I want to watch. And the formulas work, to be honest with you. But there's never any guarantee. It would be insane to tell you now that this show is going to do better than anybody else, because I haven't started filming it yet.
Do you have a number in your head of what sort of rating would be a win for you?
Cowell: That's a very good question. I mean everything over 20 million [viewers] would be a good first week, right?
It would be great. Idol at this point is doing 22 million, down from a high of 31 million.
Cowell: Well, we have a fifth of your population in the U.K., and on the final last year, 21 million people tuned in. It's a vast amount of people in this small country. But I don't take anything for granted. I've sat in there many, many times during auditions, thinking this is going to be a complete and utter disaster, and then somebody good walks in an hour later.
Idol was notorious for tension on the set. Is it just a part of something that big and successful, there's going to be bad blood?
Cowell: There wasn't bad blood from my point of view. I was very grateful for the show because otherwise I wouldn't be talking to you today. It did a lot of good for a lot of people, and we all benefited from it. It's sad when you read about the producers saying, "I'm glad Simon's not on the show anymore," that "it's better without him," because you kind of wish that they would say that to your face rather than in public. Because I didn't feel that when I was on the show. I thought we all liked each other. And that's why I'm happy now that I'm launching something new with people who do want to work with me.
So the notion that you would be happy if Idol failed without you, is that just fanciful?
Cowell: I never said that. I still talk to Randy [Jackson], Ryan [Seacrest], [producer] Kenny Warwick, [executive producer] Cecile [Frot-Coutaz]. A couple of people maybe would have a grudge, but no, we always said that if that show remained popular it means that people are still interested in these types of shows. But we are competitive with each other, which is healthy. Each show wants to do better than the other. But it's not just Idol, it's Dancing With the Stars, it's Mark's new show, we're all competitive with each other. But that's a good thing.
When Idol producers agreed to end Pop Idol in Britain to keep you as a judge here in the U.S., that provided a clear opportunity for X Factor. What was that negotiation like?
Cowell: Fox at one point may have thought, when I launched X Factor, that we were then going to take it to a competing network [in the U.S.]. And that was never the case. We did have offers from other networks. One was very aggressive about trying to persuade us to put it up against Idol.
Does it start with "N"?
Cowell: You never know. But Fox has given me my break [in the U.S.], and they've been very good to me over the years, so we were never going to do that. And in the end, we came to a very amicable agreement that last year was going to be my last year on Idol, but we'd left [the show] in good shape. After nine years, to still be getting over 20 million [viewers] was an achievement. And there was definitely a gap in the market from September to December for something new, because there aren't really any shows like this on at that time of the year.

What is different about launching X Factor now versus Idol 10 years ago? Aside from the weight of expectation.
Cowell: You've got so many more outlets now with the Internet. Word definitely spreads a lot quicker. I think our timing is good because what I've seen in the last 12 months, from my record company perspective, is that there's this whole new generation of artists who've come along who've really worked out for themselves the type of artist they want to be, even the younger singers. And it's almost like they've kicked out the old guard over the last 12 months. People like Justin Bieber, Katy Perry, Lady Gaga -- Rhianna, how she's developed in the last year. Even a show like Glee, I never would have predicted three years ago being so popular. So I hope that the show can reflect what's going on in the charts, that you've got a different type of contestant than we used to.
You'll shoot X Factor on the same stage as Idol, correct?
Cowell: Yeah.
In the U.K., it has an arena feel. Is that going to be different here?
Cowell: It's going to look similar to what we did in the U.K. We have a very, very good team of designers and we've come up with something that I think is going to look fantastic. But I'm keeping a lot of these things close to my chest because, as you say, there's an awful lot of competition out there right now, and we hope to surprise you people with the way the show is going to look.
We already broke the news that L.A. Reid will be a judge. We've heard about the Mariah Carey pregnancy and why she won't be a judge. So are we going to have little things leaked out until September?
Cowell: Yes, everything we're trying to keep secret will be leaked within seconds. And you're going to know exactly who we're talking to and who we're concerned with and who we're not. And the truth is that the reason we haven't announced the panel yet is that nobody can agree. New people keep coming along every week who we want to see. And that's why we haven't confirmed the judging panel yet.
The formation of the judging panel, especially watching what happened with Idol after you left, has got to be one of the most fascinating processes to be inside of. How do you weigh these various elements that you want and the chemistry?
Cowell: What you do is you make a decision, then you get nervous about it, then you wake up in the middle of the night saying, "I've made a terrible mistake." You call everybody the following day to say you've changed your mind and then 24 hours later you go through the same process again. And then when you think everyone's agreed, you get a phone call from a producer at three in the morning saying, "I've got to speak to you. I'm really nervous about this decision. I think we're doing the wrong thing." And I say, "Oh God, here we go again." But this happens on all of our shows. I've been on shows where the day before we're due to film, we haven't decided who's going to be on the show.
The judges commit a huge amount of time.
Cowell: I always put it down in basic terms: You've got to imagine that you're having a dinner party, and it's a very, very long dinner party and who you could bear to spent that much time with. Because if you haven't got chemistry or if you can't work together, it is total, utter misery.
Have you developed a taste for Pepsi? Because they're your partner on the show and they've been ruing the day they passed on Idolfor the past 10 years.
Cowell: If I didn't like Pepsi, I don't think we could have agreed to do a deal with them. And I do actually like it and I drink it, so no problems there.
I do miss you as a judge on Idol. Nobody is saying the words that you used to say, which is "That was a huge mistake" and "You're probably gonna be gone." Do you watch?
Cowell: I watched it a couple of weeks ago. And it was interesting. I was watching it with some friends. And for a moment, it's like you're on the show and somebody's singing and you want to say something, and then suddenly you realize you're not on the show and you're listening to somebody else. It's a really odd experience. But they genuinely seem to be happy and the audience seemed to like it so I guess everyone's happy.