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Analyst Ups Netflix-Nickelodeon Debate

26 Mar, 2013 By: Erik Gruenwedel

Since launching its “Just for Kids” streaming portal, Netflix has been singled out for undermining TV ratings at Nickelodeon — the cartoon channel owned by Viacom and home to “SpongeBob SquarePants” and “iCarly,” among others.

While Netflix CEO Reed Hastings and Viacom chief Philippe Dauman have repeatedly denied any correlation, the proof appeared in the pudding last May when Time Warner CEO Jeff Bewkes said ratings at Cartoon Network had increased. Sentiments echoed separately by Disney CEO Bob Iger regarding children viewership at The Disney Channel.

Now Todd Juenger, analyst with Sanford Bernstein in New York, says Viacom’s increased subscription video-on-demand license agreements with Netflix and others, continues to hurt Nickelodeon ratings.

In 2012, Nickelodeon TV ratings dropped 14% in Netflix households, compared with 12% in non-Netflix homes. The ratings declines were even more pronounced for Nick Jr. (down 14%), Nick Toons (down 21%) and TeenNick, which saw ratings decline 17% in Netflix homes while remaining flat in non-Netflix homes.

By comparison, Cartoon Network ratings increased 15% in Netflix homes, mushroomed 38% at The Hub, 17% at Disney XD, and 10% at Sprout; while declining 2% and 4%, respectively, at Netflix homes watching Disney Channel and Boomerang.

Notably, Cartoon Network inked an SVOD deal with Netflix in January, while Disney and Netflix signed a landmark streaming deal set to begin in 2017 for movies, and earlier for catalog Disney Channel fare.

In a March 25 note, Juenger cautioned that increased availability of children’s content on Netflix conditions kids and their parents to skip linear TV. Indeed, the “Just for Kids” section is designed so children can navigate content choices without parental supervision since the programming has been pre-screened by a nonprofit child advocacy group.

Meanwhile, Dauman says Nickelodeon is fighting to regain children and younger viewers.

During a Jan. 31 fiscal call, Dauman said Nickelodeon had centralized programming decisions to the Los Angeles office, in addition to enhancing multi-platform viewing options such a branded app slated to launch this year.

“We’ve added more animators, more animation talent, we speeded up the development process, and importantly, we are also speeding up the production process,” Dauman said. “Our existing franchises will be at least partially reinvented to be more exciting to girls and boys alike.”

About the Author: Erik Gruenwedel

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