The former Sex Pistols frontman blasted the likes of American Idol and The X Factor for failing to produce acts that would "break barriers" and "do good things".
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Lydon told NME: "[Talent shows are] unimportant. And it's a shame that the music industry has been taken over and dominated by them. Particularly American Idol… you know, the way they love to awards themselves every year, those institutions.
"Unfortunately there's some fantastic singers that come out of that, but they're karaoke. It becomes like the way record companies used to operate.
"In fact, if you ever want to know why I'm not on a record label, look at The X Factor! Honestly, of all the people that strive to break barriers in music and do good things and write great lyrics, not one of them would ever pass the first round on any of these competitions."
Lydon went on to claim that his reformed band Public Image Ltd are "very close" to signing with a label, having pulled out of other deals involving "shenanigans or dictatorships".
Their latest album, tentatively tiled This Is PiL, is expected to be released in the spring.
