Pepsi Offering New 'X Factor' Winner Grammy Commercial, $5 Million Contract With Sony's Syco

Pepsi is upping the stakes of its historic prize package for "The X Factor" by offering the Season 2 winner another $5 million record deal (this time with Simon Cowell's Syco Entertainment on Sony) as well as the chance to develop, create and produce their first original track and film the accompanying music video. The Pepsi-backed video will debut during the 2013 Grammy Awards, set to air Feb. 10 on CBS.

The 2011 prize package resulted in Season 1 winner Melanie Amaro starring in Pepsi's 2012 Super Bowl commercial, a spot that generated buzz for its Elton John and Flavor Flav cameos but received mixed reviews. For Season 2, Pepsi looked across all of its music partnerships -- from the Grammys to the NFL to MTV's Video Music Awards -- for new activations.

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"The Grammys were the perfect opportunity to launch this artist's career, and in almost a different way than the Super Bowl," Chad Stubbs, Pepsi's senior director of media strategy, tells Billboard. "What's better than what's been trademarked as music's biggest night? Thinking of our music connections and music assets was part of what led us to the Grammys."

Pepsi is one of music's most powerful brands -- second only to Coca-Cola, in fact, on Billboard's 2012 Maximum Exposure chart, which ranks the 75 most effective platforms in music discovery. The brand's $60 million in "X Factor" marketing support alone was enough to buoy Warner Bros. singer Outasight into the Hot 100's top 40 last year when his single "Tonight's The Night" was the featured synch for a retrospective Pepsi spot that aired throughout the first season.

Pepsi also continues to support Amaro, whose Epic debut (helmed by Clive Davis) is set for release Dec. 4. Pepsi teamed with Walmart in early October to promote Amaro's first single, "Don't Fail Me Now," through a free-download promotion featured on in-store displays. To date, the song has sold 12,000 downloads, according to Nielsen SoundScan, while double A-side "Love Me Now" has sold 4,000 downloads and is currently being worked to radio.

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"The X Factor," meanwhile, was recently renewed for a third season by Fox despite a decline in year-over-year ratings (the show has averaged 10.6 million weekly viewers, compared to an average of 11.4 million in 2011, according to Nielsen) and amid an increase in costs stemming from judge Britney Spears' reported $15 million contract. It begins airing live episodes this week, with new hosts Khloe Kardashian and Mario Lopez filling in for Season 1's Steve Jones and Nicole Scherzinger.