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Nick sets course for future after rough patch

Variety Junior 2012

Just about a year ago, Nickelodeon told the TV world the bottom had mysteriously dropped out of its ratings in September with a massive double-digit sinking of viewership.

Today, while the leading ad-supported kids network is still looking for answers, it seems to have a plan.

First off there has been some major exec reshuffling. Animation president Brown Williams recently announced her departure. She had been responsible for lot of heavy-duty Nickelodeon animated fare, including “Blue’s Clues” and “Dora the Explorer.” More recently she has guided a major new hopeful — the return of a new CG-animated “Teenage Mutant Ninja Turtles.”

And ascending to a bigger role is Russell Hicks, a 14-year Nick marketing veteran and its chief creative officer since 2008, rising to a new position of president of content development and production for the Nickelodeon Group.

In addition to a new “Turtles,” which starts up later this month, there is a bunch of other new projects as well on the way, including the animated series “The Legend of Korra” and the live-action strip “How to Rock,” as well as 300 new episodes of existing animated shows and 650 new episodes of live action shows.

Nickelodeon has said the new programming push is the “largest and most diverse development slate in the network’s history.” Not only that, but according to analysts, Nickelodeon will get a bigger share of Viacom’s company wide programming development funds.

Nickelodeon continues to point to research when it comes to kids growing engagement with its brand, especially in the multiplatform TV world. A recent international focused study showed 87% of Nickelodeon’s TV-viewing auds having accessed to the brand on more than one platform and with 17% doing it regularly.

Near term, though, Nickelodeon has more work to do. Analysts say part of the network’s mysterious 20% rating drop has to do with major Nick series, including “SpongeBob SquarePants” and “iCarly,” getting long in the tooth.

“They are burnt out,” says Shelly Hirsch, chief executive officer of media agency Beacon Media, which buys kids advertising time for a number of toy clients. “They have five or six franchises that are tiring.”

How tired? Todd Juenger, media analyst at investment banker Sanford S. Bernstein, says “SpongeBob” and ‘iCarly,” currently makes up about 49% of the programming hours on Nickelodeon. That’s way up from 12% for the top two Nick programs in 1998.

“I understand when you have a big winner, it’s tempting to ride it a little more each year,” says Juenger, “but it creates a big cliff event. When those programs stop working, you have a massive hole to fill.”

Nickelodeon execs declined to speak to Variety about any current issues revolving the network.

Other analysts say Nickelodeon’s issues have been compounded by distribution concerns – — launching new channels such as NickToons and Nick Jr. “They started siphoning their very young viewers,” says one TV executive.

Fingers also point to subscription video on demand program deals with Netflix, though Viacom Chief Executive Officer Philippe Dauman has said those deals had little impact on the mothership. Bernstein’s Juenger believes the Netflix effect on Nick amounts to around 5 percentage points of the 20% decline in rating points.

Talking to media analysts at an Viacom earnings call in the fall 2011, Dauman pointed to the veracity of Nielsen viewing data. Many agree with him. in part.

To a degree, Nielsen is culpable,” says Beacon Media’s Hirsch. “It happened overnight.”

Recent Nielsen ratings show for total day Nickelodeon viewership was at 1.78 million viewers in August, down 21% from a year ago. (Kids 2-11 and 6-11 demos have had similar declines).

Disney Channel, which doesn’t have regular TV advertising, was down 1% to 1.93 million overall viewers. Things are looking up for other kids networks. Turner’s Cartoon Network climbed 6% to 1.3 million viewers, and Disney’s still new young-boy skewing channel Disney XD improved 16% to get to 401,000.

Nielsen has had hiccups before, say analysts, but typically it doesn’t affect just one network.

“This was unusual, but I don’t think it was necessarily a Nielsen issue,” admits Brad Adgate, senior VP for media agency Horizon Media. “If it was you would have seen other drops across other kids networks.”

By all accounts Nickelodeon might make some gains near term, especially in the fourth quarter. This will come in looking at year-to-year comparisons, especially against those low results of the fourth quarter 2011. A new version of highly identifiable kids franchise will help.

“‘Turtles’ is the fastest way to to do something,” says Bernstein’s Juenger. “Parents will have some nostalgia factor toward the show. Viacom thinks they will have a big merchandise angle. It’ll do fine.”

The continuing good news for Nickelodeon comes with TV advertisers. Nick and its associated young-skewing networks such as NickToons, TeenNick, Nick Jr., still hold sway with the bulk of TV media buying for kids 2-11 and kids 6-11. Viacom says it controls around 75% of all kids TV ad inventory.

“Nickelodeon is the place to be if you want to reach kids,” Dauman has said. “There aren’t too many advertising outlets to go after kids.”

Just about a year ago, Nickelodeon told the TV world the bottom had mysteriously dropped out of its ratings in September with a massive double-digit sinking of viewership.

Today, while the leading ad-supported kids network is still looking for answers, it seems to have a plan.

First off there has been some major exec reshuffling. Animation president Brown Williams recently announced her departure. She had been responsible for a lot of heavy-duty Nickelodeon animated fare, including “Blue’s Clues” and “Dora the Explorer.” More recently she has guided a major hopeful — a new CG-animated “Teenage Mutant Ninja Turtles.”

And ascending to a bigger role is Russell Hicks, a 14-year Nick marketing veteran and its chief creative officer since 2008, rising to a new position of president of content development and production for the Nickelodeon Group.

In addition to the “Turtles,” which starts up later this month, there are a bunch of other projects on the way, including the animated series “The Legend of Korra” and the live-action strip “How to Rock,” as well as 300 new episodes of existing animated shows and 650 new episodes of live-action shows.

Nickelodeon has said the programming push is the “largest and most diverse development slate in the network’s history.” Not only that, but according to analysts, Nickelodeon will also get a bigger share of Viacom’s companywide programming development funds.

Nickelodeon continues to point to research when it comes to kids growing engagement with its brand, especially in the multiplatform TV world. A recent international focused study showed 87% of Nickelodeon’s TV-viewing auds having accessed the brand on more than one platform and with 17% doing it regularly.

Near term, though, Nickelodeon has more work to do. Analysts say part of the network’s mysterious 20% rating drop has to do with major Nick series, including “SpongeBob SquarePants” and “iCarly,” getting long in the tooth.

“They are burnt out,” says Shelly Hirsch, chief executive officer of media agency Beacon Media, which buys kids advertising time for a number of toy clients. “They have five or six franchises that are tiring.”

How tired? Todd Juenger, media analyst at investment banker Sanford S. Bernstein, says “SpongeBob” and ‘iCarly,” makes up about 49% of the programming hours on Nickelodeon. That’s way up from 12% for the top two Nick programs in 1998.

“I understand when you have a big winner it’s tempting to ride it a little more each year, but it creates a big cliff event,” says Juenger. “When those programs stop working, you have a massive hole to fill.”

Nickelodeon execs declined to speak to Variety about any current issues revolving the network.

Other analysts say Nickelodeon’s issues have been compounded by distribution concerns — launching channels such as Ni
ckToons and Nick Jr. “They started siphoning their very young viewers,” says one TV executive.

Fingers also point to subscription video-on-demand program deals with Netflix, though Viacom chief executive officer Philippe Dauman has said those deals had little impact on the mothership. Bernstein’s Juenger believes the Netflix effect on Nick amounts to around 5 percentage points of the 20% decline in rating points.

Talking to media analysts at an Viacom earnings call in the fall 2011, Dauman pointed to the veracity of Nielsen viewing data. Many agree with him in part.

To a degree, “Nielsen is culpable,” says Beacon Media’s Hirsch. “It happened overnight.”

Recent Nielsen ratings show for total day Nickelodeon viewership was at 1.78 million viewers in August, down 21% from a year ago. (Kids 2-11 and 6-11 demos have had similar declines.)

Disney Channel, which doesn’t have regular TV advertising, was down 1% to 1.93 million overall viewers. Things are looking up for other kids networks. Turner’s Cartoon Network climbed 6% to 1.3 million viewers, and Disney’s still new young-boy skewing channel Disney XD improved 16% to get to 401,000.

Nielsen has had hiccups before, say analysts, but typically it doesn’t affect just one network.

“This was unusual, but I don’t think it was necessarily a Nielsen issue,” says Brad Adgate, senior VP for media agency Horizon Media. “If it was, you would have seen other drops across other kids networks.”

By all accounts Nickelodeon might make some gains near term, especially in the fourth quarter. This will come in looking at year-to-year comparisons, especially against those low results of the fourth quarter 2011. A new version of a highly identifiable kids franchise will help.

” ‘Turtles’ is the fastest way to to do something,” says Bernstein’s Juenger. “Parents will have some nostalgia factor toward the show. Viacom thinks they will have a big merchandise angle. It’ll do fine.”

The continuing good news for Nickelodeon comes with TV advertisers. Nick and its associated young-skewing networks such as NickToons, TeenNick, Nick Jr., still hold sway with the bulk of TV media buying for kids 2-11 and kids 6-11. Viacom says it controls around 75% of all kids TV ad inventory.

“Nickelodeon is the place to be if you want to reach kids,” Dauman has said. “There aren’t too many advertising outlets to go after kids.”

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