Nickelodeon Nets Gain Small Rev Hikes

Pushing its three key kids networks to higher revenue levels -- Nickelodeon, Nicktoons and TeenNick -- the Nickelodeon group of networks posted single-digit percentage revenue volume gains this kids upfront TV season.

“Going in the market, we were in a good position,” says Jim Perry, head of advertising sales for Nickelodeon Group, with ratings overall higher by single digits -- especially higher viewership in Nicktoons and TeenNick. “We finished with volume up and pricing up and led the market in both areas,” says Perry, around single-digit percentage gains in each area.

Perry estimates the overall kids market at around $750 million, down a bit overall from a year ago. He says Nickelodeon picked up share from its competitors. Estimates are that Nickelodeon networks collectively have a 60% share kids TV 2-11 viewing.

In particular, Nickelodeon was looking to improve the price performance of its faster-growing networks -- Nicktoons and TeenNick, looking to package those networks in with the big Nickelodeon.  

In the first quarter, Nicktoons total day viewership climbed 6% to 180,000 average viewers; and then moved up to average 202,000 in the second quarter. TeenNick was up 85% to 211,000 in the first quarter, then grew to 254,000 in the second quarter. Nickelodeon slipped 3% to 1.802 million viewers in the first quarter, and then declined to 1.6 million in the second quarter.

The aim was to package those networks because of their complementary audiences -- younger to older, ages 2-14. The effort was to “keep the viewer in the Nickelodeon ecosystem,” says Perry.

One kids media-buying executive said there was some big sticker price shock at Nickelodeon’s upfront pricing. “They were trying to sell all three at the same price” -- which the buyer says resulted in a 15% to 20% overall cost-per-thousand viewer price increases in package deals when factoring in Nickelodeon, TeenNick and NickToons.

“It was an education process, and there was a variety of responses,” says Perry, who declined to reveal pricing specifics. “But we ended up in the great place.” Perry insists there was overall reach and frequency, as well as CPM benefits for those TV marketers who bought in.

Some of the growing categories, he said, included movie studios and retailers. Toys and movies marketers remain two of the biggest kids TV advertising categories, says Perry. After that comes consumer packaged goods.

Food marketers remained a depressed category, says Perry, down from a year ago -- no longer major kids TV advertisers. A new growing category is wireless services/consumer electronic products and general electronic retailers targeted at kids TV viewers.

Concerning Nickelodeon’s main competitor, Turner’s Cartoon Network, one executive close to the company said with its reduction in its programming hours -- due to expansion of Adult Swim -- it wrote some high single-digit CPM increases among its TV advertisers in the key 10 weeks of the pre-fourth-quarter holiday period.  There were also high single-digit price increases in the pre-Easter and back to school fall periods.

Executives also believe Cartoon Network overall upfront revenue volume declined year-to-year partly as a result of its programming schedule contraction. Total gross ratings points for Cartoon Network were 18% versus the year before.

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