The kids segment of the upfront is underway and some
advertisers are sending some extra dollars to Nickelodeon's rivals following
the sudden double-digit ratings drop that hit the market leader during the
fourth quarter.
Nickelodeon, however, remains dominant, and has been able to
retain its pricing power despite the viewership issues suffered by SpongeBob SquarePants and other aging
franchises on the network.
With broadcast virtually wrapped up and most major cable
networks more than halfway done making upfront deals, the kids market sprang to
life this week.
Media buyers said the ratings plunge at Nickelodeon, long
the market leader, could lead to a share shift if Nickelodeon pressed for price
increases. But despite ratings gains by the non-commercial Disney Channel and
Cartoon Network, advertisers still need to do a significant amount of business
with Nick, limiting possible reductions in spending.
Cartoon Network was doing business and getting mid-to-high single-digit increases in high-demand pre-holiday time periods, according to market sources.
Overall, the market is expected to be flat with categories
like electronic games growing, but the movie business dropping from last year.
The big drop in Nickelodeon's ratings happened during last
year's fourth quarter. Because that's the key holiday season in the kids
business, Nick had to provide its advertisers with a blizzard of make-goods
during the quarter.
Buyers said that Nickelodeon was able to buy some goodwill
by the way it made its advertisers whole when ratings dropped. "The handled it
appropriately and professionally," on buyer said.
Philippe Dauman, CEO of parent company Viacom, described the
drop as "inexplicable." Some analysts blame kids programming being available on
Netflix for some of the decline.
The ratings shortfall led to a drop in ad revenues and
disappointing earnings for Viacom in the fourth quarter.
