Kids these days aren't like they used to be. Just ask executives at television networks that cater to children. Over the past year, a sea change in viewing habits has thrown one of the most profitable segments of Hollywood into a chaotic period of transition. Longtime leader Nickelodeon suffered a nearly 30 percent drop in ratings in February, while rivals including Cartoon Network have seen increases. At the same time, upstarts such as The Hub, PBS Kids, Sprout and even Netflix are siphoning off viewers, to say nothing of the online programming and gaming options ...
In many ways, Nick is having a mid-life crisis. A couple of years ago, it made a sizable commitment to CG animation. There were the Dreamworks shows (Penguins of Madagascar, Kung Fu Panda). There was Robots and Monsters. Then DWA sent How to Train Your Dragon, the series to APU/Wildbrain and the crew of Robot and Monster which staffers told me was one of the smoothest-running Nick series in ions, got pink-slipped before the show had its network launch.
Added to which, the hand-drawn Adventure Time, which Nick declined to greenlight and put into turnaround, is now a hit for a resurgent Cartoon Network, and CN's ratings are up, even as Nickelodeon's sag. It's enough to give a cartoon executive heart-burn ... and second thoughts about being all CGI, all the time.
... Disney Channel for the first time beat Nickelodeon in first-quarter 2012 among children 6-11 when measured around the clock. Most analysts attributed the shift in part to Nickelodeon relying on only a handful of high-performing series (SpongeBob, iCarly) while Disney, Cartoon Network and others now offer a more diverse slate of new shows.
"Our strategy has been to build a strong, consistent portfolio of content and not rely too heavily on any one series," says Gary Marsh, president and chief creative officer of Disney Channels Worldwide. "If you get into that trap, the bottom can fall out on you, and I think that's what happened to Nickelodeon." ...
Me, I think ratings and the fortunes of the kids' networks are cyclical: down today but up sixteen months from now when new product kicks in. As I write, Nickelodeon is doing serious development work, with board artists creating shorts that could, audiences willing, blossom into hit series down the road. (Sponge Bob, despite corporate wishes, will not last forever.)
Nick was not going to stay Top Dog forever. No entity does. But failure is not a death warrant. For resilient, innovative companies, it's a wake up call that says: "You had your run, now get off your backside and try some new approaches."