UPDATE PM: Sources close to the producers of X Factor confirm that Britney Spears indeed is out as a judge after one season. “The producers and Simon (Cowell) were having discussions over the holiday period about the year ahead. Britney had never been part of their plans for this year but realistically that was never going to come as a surprise to her either,” a source said. I hear Cowell and his team “have a pretty clear idea of the panel they would like for next season and discussions with one possible new judge have been going on for some time now.” The prospective new addition is expected to meet with Fox and the show’s producers in the next couple of weeks.

PREVIOUS AM: Let the annual circus program known as X Factor Judge Shakeup begin! The months of speculation that Britney Spears won’t be back as a judge on The X Factor next season reached fever pitch overnight, following a TMZ report out of Spears’ camp that she is “quitting” the Fox singing competition. The network and X Factor creator/executive producer/star Simon Cowell are not commenting, but it appears that Spears’ team has decided to get ahead of the story and position her exit from the show as “entirely her doing” so she can “focus on her music”. Sound familiar? Nicole Scherzinger, who was sacked as an X Factor judge last January, had her handlers feed E! a story that her firing from X Factor was her decision and her wanting “to focus back on her music career.”

For Spears, the move has very good timing — she just got praised by Fox chairman Kevin Reilly at TCA, offering some credibility to a story of a Spears departure on her own accord. “I think Britney did a really good job,” Reilly said on Tuesday when asked about rumors that Spears may be out. ” She came on, people remain fascinated with her and always will be.  She’s just an interesting figure who’s lived a unique life, and I thought she brought some of that.” Asked whether the network would “be on board for bringing her back,” he said “Yeah.” Spears had a one-year contract, worth close to $15 million, so she won’t be dropped but rather not asked to come back. She didn’t bring a ratings boost to the show, whose numbers were down double-digits from last fall, in part because of a crowded field that featured the first fall edition of NBC’s The Voice. With Spears all but gone and L.A. Reid already announcing his departure, Demi Lovato is the only X Factor judge from Season 2 still in the running to continue alongside Cowell next fall. In addition to providing some sense of continuity, Lovato’s staying chances were boosted by a People Choice Award last night for best celebrity judge.