With millions of people tuning in each week to American Idol, chances are some readers of Whiskey & Gunpowder are among them. Although many may not like to admit it. Either way, you can learn a valuable investing tool by paying attention to the finer points of Fox’s hit reality show. There are plenty of people out there making money for nothing.

Tonight, after nearly four months of competition and thousands of possible contestants, the winner of American Idol will be announced on live television. This year’s contest, seen by hundreds of millions of viewers who accounted for even more votes via phone calls and text messages, has been one of the most popular of the show’s successful seven-season run.

So after all that, America will choose between 17-year-old wide-eyed wunderkind David Archuleta and 25-year-old Kansas City rocker David Cook. While the chance to win the competition looms large for both contestants, both will undoubtedly enjoy lucrative careers.

Over the past seven seasons, American Idol contestants have posted as many as 71 singles on the Billboard Hot 100 chart. The show has produced successful recording artists, multiple Grammy winners, and even an Academy Award winner. There is no denying the overwhelming achievement of what some consider nothing more than a glorified karaoke contest.

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Why Has Oil Surged?

Dwindling value in the dollar, a crisis in U.S. credit, rising demand from overseas. These are all explanations for the recent surge in oil prices. But that’s not the whole story.

There are more dangerous and deadly reasons for the rise in oil prices, and the real truth explains why we can expect this surge to last for a long time to come. Click here to read about the “bloody backlash.”

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Since becoming one of the most successful reality television shows of all time and the flagship program of the Fox network, American Idol has established itself as a marketing monster and moneymaking machine. With lucrative sponsorships from companies like Coca-Cola and AT&T, along with millions of dollars pouring in from other miscellaneous sponsors, American Idol has made many people very rich.

One of the ways Idol has been able to generate viewership and buzz is through the songs the contestants are able to perform. Over the years, performances on the show have evolved from classic standby numbers your grandmother may even strain to recall to many of today’s chart-topping hits. Even the elusive Lennon-McCartney songbook was opened for this season’s show.

The success of the show has opened up a dual incentive and revenue stream between the show’s producers and the owners of the songs they sing. The simple reason for this is royalties. Each time a song is performed on American Idol, the show’s producers pay the owner of that song’s rights a royalty fee. This creates a mutually beneficial, symbiotic relationship between Idol and the songwriters and recording artists who lend their work to the show.

The concept of royalty fees is simple, while the application is quite complex. But for our uses, simply imagine already incredibly wealthy musicians and writers sitting back and collecting checks for seemingly doing nothing. On last night’s finale performance show, popular songs by artists such as U2, Elton John, and John Lennon were performed. These performers have (or had) an unimaginable amount of wealth and fame, and last night’s performances simply added to that. Not only that, but recordings of the Idol contestants performing the songs are then sold as downloads in the Apple iTunes music store. You can bet that Bono, Elton, and Yoko will be picking up checks for those sales, as well.

The relatively new relationship between American Idol and Apple has generated even more money in royalty fees and more exposure for the original artists. This season, popular performances of Leonard Cohen’s biblical ballad “Hallelujah” and Lee Greenwood’s patriotic anthem “Proud to Be an American” boosted the sales of the original recordings on iTunes, as well as millions of downloads of the Idol versions.

For doing nothing, Cohen and Greenwood collected handsome royalty checks thanks to the popularity of American Idol.

For many people, the concept of royalty fees is exclusive to the entertainment field. We’ve all heard the story of Michael Jackson outbidding Paul McCartney for the rights to The Beatles recordings and the amount of money he has been able to make from the royalty rights alone.

But did you know that regular, everyday investors like yourself could also get in on the royalty game? It may not be as glamorous or public as sales of your song on iTunes, but you can still mint a pretty penny from collecting royalty fees.

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Double Your Money — While Wall Street Is Tanking

While others are losing their shirts as the stock market crashes, you have the chance to come out ahead.

There’s one service that will help you during the turbulent markets 2008-2009 markets ahead…

Find out how to stay safe and profitable while others sweat out the recession here.

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The royalty fees I’m talking about are not in the entertainment sector at all, but rather from the same oil and natural gas, gold, silver, and resource stocks we discuss all the time. These fees are paid by royalty trusts companies, and many investors have made a lot of money by, in essence, doing nothing.

With a royalty trust, you, essentially, own a piece of land that is rich in oil, gas, or any of these resources if you become a shareholder. These companies then rent that land to developers and miners who do all the dirty work of extracting the resource from the ground. The royalty fee is paid back to the trust, and a share of that money is then passed on to you.

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