Streaming services drawing kids away from cable, too
Seven-year-old Caleb Moushey rarely if ever watches conventional TV shows. “Everything is Netflix,” said his mother, Ally Brown, an insurance agent in the St. Louis area who also has a 5-year-old and a baby on the way.
More and more kids are becoming like Caleb. The cable networks for children, in decline for years, are now in a free fall. This season’s ratings for the 2-to-11 set are shaping up to be the worst yet. And few in the industry predict a turnaround.
The implications are enormous for giants such as Viacom and Walt Disney. Viewership of the three most-popular networks for the very young — Nickelodeon, the Disney Channel and the Cartoon Network — is down more than 20 percent this season from a year ago, according to data from Nielsen. It’s a low point in a long-running trend as Netflix, YouTube and other streaming services have taken off.
Media companies still make money from children’s television, with the most-watched cartoons spawning toy brands and licensing deals that can generate millions of dollars. So “the traditional brands are stuck in a tough position,” said Birk Rawlings, who left Nickelodeon to run DreamWorksTV, a YouTube channel for children. “They can see what is changing, but to embrace what’s new they must run away from a healthy business.”
Rawlings was vice president of animation at Nickelodeon when its parent company, Viacom, licensed many of its kids shows in a package to Netflix in 2010. Netflix was able to lure customers with Nick’s biggest hits, including “SpongeBob SquarePants.”
At the time, Netflix had fewer than 20 million subscribers. Now, it has 125 million. Nickelodeon considers a show a hit if it draws 2 million or so viewers.
Meanwhile, the amount of time that the youngest watchers spent viewing conventional television fell 30 percent between 2010 and 2017. And U.S. advertising sales for kids’ networks haven’t grown for five years, having plateaued at about $1.2 billion annually. (Disney and Nickelodeon declined requests for interviews for this story.)
Netflix is ramping up the competition further by bringing more youth-oriented production in-house. Last year, it hired Melissa Cobb away from a DreamWorks joint venture to run a kidsand-family division, which just produced the live-action series “Alexa & Katie.”
The company also hired two writers, Scott Thomas and Jed Elinoff, from Walt Disney Co.’s Disney Channel, where they recently created a follow-up to “That’s So Raven.”
Disney, Nickelodeon and the Cartoon Network are playing catchup. Nick has a 3-year-old streaming platform called Noggin. Time Warner’s Boomerang online subscription service shows classics such as “Looney Tunes,” and the Cartoon Network released videos from the popular show “Steven Universe” on its app before they appeared on television. Disney has announced plans to yank its movies from Netflix for its own streaming service that will debut in 2019.
The networks have to figure out how to make more money from the shows they produce.
“We have to believe” the dollars “will catch up to the audience,” said Christina Miller, head of the Cartoon Network and Boomerang. “If it’s the opposite, game over.”