Friends can't stay apart forever!
Starting Monday, June 3rd
3:30pm EDT & PDT
The Cartoon Network

Viacom's TNN Stealth Attack

Cartoon Network's Falling Ratings

WB TV on the Way Out?

Sailor Moon on the Way Back In!

What a difference a year makes!

When we last left the Cartoon Network, WB TV had taken over control of it and the other Turner networks. Since then, the WB TV leadership has successfully lowered costs, reduced duplication among the networks, reduced competition between the networks, and has weathered the worst period of ad sales in the history of televison.

However, all the other networks in the AOL/Time Warner family (except possibly TNT) are poised for losses in a recovering economy and have been left vulnerable to attack by other networks.

First, the Money
Curiously, the WB network itself continues to lose money--even though it has been the main beneficiary of the WB TV leadership. (No cuts at that network.) The WB network has always lost money while most of the Turner networks were profitable.

So in other words, what is going on is that as the U.S. economy gets better, the AOL/Time Warner networks are not. Other networks are being more successful at selling time for commercials than the AOL/Time Warner networks. Why? Because the WB TV leadership had positioned their networks for cost-savings but not for keeping their audiences.

The best example of this is..... the Cartoon Network. This network was the most profitable network of ALL the AOL/Time Warner networks. For example, on average, the Cartoon Network would get 3 times the ad sales of CNN. And, for the last few years the Cartoon Network would place in the top 5 most watched networks on cable television and (more importantly) be one of the most desirable networks for advertisers.

But it's the Programming, Stupid!
The cuts and programming decisions by the WB TV leadership seriously damaged the Cartoon Network's ability to keep a unified schedule and build on its past successes. WB TV leadership made (or were responsible for) the following changes:

  • Forcing out Betty Cohen, the president of the network.
  • Replacing her with a "General Manager," Jim Samples.
  • Reducing one of the most successful blocks, Toonami, to only 2 hours.
  • Moving Toonami to one of the worst time periods for such a block.
  • Cutting new, quality programming and development.
  • Slashing the acquistions budget (used for getting new series).
  • Forcing out Dea Perez, the acquisitions executive for the network.
  • Forcing the Turner Entertainment networks to all share one acquisitions executive, Jonathan Katz.

So, when the Cartoon Network recently tried to sell time for commercials to advertisers for this fall and the Christmas season (the most important time for commercials) the network did (and still is doing) lukewarm business--even as other non-AOL/Time Warner networks are on the upbound.

Nielsen TV Cable Ratings
In households with cable television
January 1 - March 31, 2002
Compared to the same period in 2001
  1.  Lifetime          2.2   *
  2.  TNT                *   +6%
  3.  USA               1.7  -11%
  4.  Nickelodeon       1.7  +6%
  5.  TBS               1.6  -16%
  6.  Cartoon Network   1.6  -6%
  7.  Discovery         1.2  -8%
  8.  Fox News          1.2  +33%
  9.  A&E               1.1  -21%
 10.  TNN               1.0  -9%
 11.  Learning Channel  1.0  +0%
 12.  ESPN              1.0  +11%

      * Percentage or Rating
        not published.

Do you know the real reason Lifetime is number one? Because they thought that Gerry Laybourne's Oxygen Network was going to be a real threat. Instead, Oxygen is nowhere! (Lifetime spent a lot of money on original programming and unexpectedly wiped out everyone else!) In March, Oxygen averaged 63,000 viewers in primetime; Lifetime averaged 2.4 million.

CNN (+29%) is the one success story which WB TV can claim. But as you and every media buyer can see, it's actually another failure. Fox News, a relatively new network is at #8; it doesn't matter how much CNN is up by! CNN is not even in the top 12!

In the TV business they call this early selling of commercial time the "Upfront Sales." And as part of WB TV's grand plan, Kids' WB and the Cartoon Network conducted their presentation together to advertisers. Held on Wednesday, March 13, 2002 in New York City, they made a lot of claims "together" since separately the 2 concerns have been going down in ratings and in demographics when compared to other networks.

The people who were in this room are called media buyers--one of which told us that they were "...spectacularly unimpressed" with the plans for Kids' WB and the Cartoon Network in 2002/2003.

AOL Responds, sort of...
AOL has not been blind to this and other changes at Turner networks--especially since their overall Nielsen ratings had been in decline for months (see the Nielsen Sidebar on this page). But more important to AOL is how this situation is tracked by Wall Street analysts. AOL/Time Warner stock is seriously depressed. It has been dragged down over the months by different factors. At the moment, problems with AOL's online advertising sales are the current blame but the TV networks did play a part earlier.

AOL started to take action months before the Upfront Sales by first letting go of Gerald Levin. This was announced on Wednesday, December 5, 2001 and seemed to surprise too many people. (Didn't everyone know this back in August?) No reason was given publicly for forcing him out, in fact Mr. Levin claimed to be retiring early, but internally AOL decided to pin the blame on him for a host of problems--including the downward spiral of their TV networks.

Then, on Friday, December 21, 2001, AOL announced that it was bringing back Ted Turner which did surprise almost everyone. For most of 2001 (and maybe even earlier) Turner had found himself outmaneuvered in board meetings. Gerald Levin was successfully using the merger with AOL to force Turner out. Ted even publicly said that he wished that he had been able to fire Gerald, "...before he fired me."

We think bringing Ted back is a great decision.

With A Stock Like This.....
Would You Care About
The WB TV's Feelings?

AOL/Time Warner stock as of 4/26/02 for the last 2 years.
Graph from Yahoo.com's Finance site.

Next, AOL moved some of its own executives around and then put the gentle squeeze on WB TV. AOL is in the process of "...encouraging" WB TV to take immediate and positive action regarding the Turner Entertainment networks. Supposedly, Ted Turner will be "...assisting" in this endeavor via his position as Vice Chairman of AOL/Time Warner.

The first positive sign of change came within a few weeks after the new year, when it was decided that Kids' WB would relinquish the Toonami name, a name that would go back to exclusive use by the Cartoon Network. Well that was nice. But, as far as we were concerned, there was still a looming problem...

The Cartoon Network, still trying to keep profits up (until any new freedoms filtered down), was considering such moves as dropping the DiC episodes of "Sailor Moon."

As the expected drop in ratings occurred, budgets had to be slashed in order to make up the difference. The Cartoon Network and the Program Exchange had both confirmed to us (after the Upfront Sales) that the network was not going to renew those episodes. They couldn't afford them anymore and had no place to schedule them. If 4Kids wanted them for their new Fox Kids' block, they could have them.

Then everything changed, very quickly.

Word leaked out that another company was planning a full-frontal attack against the Cartoon Network in its most vulnerable and profitable area.

Remember that time Ren and Stimpy made something out of raw hamburger?

TNN's Primetime Animation

Starting in the 1st quarter of 2003:

"Gary The Rat" from MediaTrip.com
Old (& New?) Episodes of "Ren & Stimpy"
Plus a number of specials.

In Development:
"The Immigrants" from Klasky-Csupo
"Joe Duffy" from Nelvana
"Stripperella" from Stan Lee

Viacom Wants You, Regardless of your Age
You gotta hand it to Viacom, they want you from cradle to grave. They got Nick Jr., they got Nickelodeon, they got the upcoming Nicktoons Network, they got MTV, they got Paramount Pictures, they got UPN (well, half of it), they got your VH1 & 2, they got CBS, they got TV Land, they got Nick At Nite, and they got a lot more than that.

But there's one thing they don't got! Have you noticed? They don't have any blocks of edgy animation for the 18-34 market. (MTV [which actually skews younger] is already full and making money.) Viacom saw how WB TV was propelling the Cartoon Network, how Disney still hadn't used the ABC brand for this sort of thing, and how Barry Diller's Sci-Fi network had repeatedly blown-off animation. So.....

Herb Scannell, president of TNN (Nickelodeon and other Viacom networks) along with his boss, Tom Freston of MTV networks, decided to take the primetime block of TNN, The National Network (formerly known as The Nashville Network before Viacom acquired it during the CBS merger), and devote it to new, original animated series and repeats of Viacom animated properties which didn't fit anywhere else. And by scheduling the block to start sometime during the first 3 months of 2003 Viacom could keep its plan a secret as AOL/Time Warner obligated its resources during their Upfront Sales.

TNN is attacking the Cartoon Network in the off-season to grab viewers. The Cartoon Network's response is expected to be a new Daffy Duck (in outer space) series which (in typical Turner fashion) may skew too wide of a demographic for advertisers. Viacom's TNN animation block on the other hand is laser targeted for the prized 18-34 year olds which have always eluded the Cartoon Network. (Though the network has found some success through the relatively cheap "Adult Swim" block--which most fans have absolutely enjoyed).

But now the Cartoon Network's most expensive time period, primetime (which doesn't attract enough of the 18-34 year olds), will mostly have repeats in competition with another network, TNN, that has new or relatively new programming geared specifically for the 18-34 year old market.

Guess which of these 2 networks could see the greatest increase in subscriptions and ad revenue in 2003?

Cartoon Network logo

Cartoon Network Summer Schedule
for Weekday Afternoons

Starting Monday, June 3rd, 2002. Times listed are Eastern & Pacific Daylight Time. Fridays may become preempted for features. The network expects to make changes throughout the summer. Consult your local listings or TV Guide Online.

  3:30pm    Sailor Moon
  4:00pm    Hamutaro
  4:30pm    Zoids

  5:00pm    Batman Beyond
  5:30pm    The Powerpuff Girls
  6:00pm    Dragon Ball
  6:30pm    Dragon Ball Z

Let the Floodgates Open!
Of interest to "Sailor Moon" fans, the Cartoon Network has (so far) responded as follows:

First, Toonami-like programming will actually expand back to 3 hours. In an attempt to recapture audience loyality and to re-establish viewing habits as soon as possible, the Cartoon Network will not wait for fall and instead will start this on Monday, June 3rd. Toonami-like programming will run from 4pm to 7pm (EDT & PDT) weekdays.

Strengthening the late afternoon block accomplishes 2 very important objectives. Viewers, who might not otherwise, will see interstitials (commercials) for what's on in primetime AND some shows could help lead-in to primetime (where the real battle for network supremacy will be fought).

Then, to solidify their position even further (and because the network was understandably caught off-guard with all these changes), they have brought back "Sailor Moon" as a transition show (to gracefully lead into Toonami) at 3:30pm. (The Cartoon Network also believes that "Sailor Moon" viewers will also like their new anime series, "Hamutaro," at 4pm.)

But it should also be noted how the network, as usual, is using "Sailor Moon" to take the brunt of starting a block (when viewership is down) to help push other shows (such as "Hamutaro"). Further, the Cartoon Network's late afternoon programming has always averaged the highest ratings with younger skewing (and girl) shows scheduled first and older skewing (and boy) shows last. Ideally, "Hamutaro" should be on at 3:30pm (or in the mornings), then "Sailor Moon" at 4:00pm, followed by "The Powerpuff Girls." We'll soon see how the ratings work out.

The network has been unsure which "Sailor Moon" series to start with. Through one of our contacts we have strongly suggested starting with episode 1 even though there are good reasons to hold off on the DiC package until the fall season. But ultimately the SOS believes that the ratings for the series and for Toonami as a whole would benefit in the long run by starting with episode 1 in June.

In a way, Toonami-like programming will now actually be 3 1/2 hours long if you include "Sailor Moon."

I'm Hamutaro and I like Ryoko and sunflowers!Hamutaro is the main character of "Tottoko Hamutaro," an anime based on Ritsuko Kawai's manga in the children's magazine Shogakou Ninensei ("Second Grader"). The anime follows the daily lives of Hamutaro and his owner, Ryoko. It began airing in Japan in 2000 and will be coming to the Cartoon Network this June.

In our never-ending exhaustive, scientific research, the SOS conducted a top secret, random sampling of some unsuspecting Japanese subjects to uncover the wild popularity of this new cultural phenomenon. So one of our top scientists asked a Japanese 4th grade class (class 4-2 in Ishiwara Elementary School, Kumagaya-shi, Saitama) their opinion about Hamutaro. The answers varied from "Hamutaro likes sunflowers!" to "No he doesn't!" ...In fact those were the only answers given, as the class quickly broke into argument. For more information about this controversial program, check out The Official Japanese Website or Asahi's English Site.

I'm a hamster owner myself.
Why do we keep using the annoying term "Toonami-like" programming? Because as far as we know an agreement was made between Kids WB and the Cartoon Network that the block known as Toonami would still only run from 5 to 7pm weekdays and that their most highly rated series, "Dragonball" and "Dragonball Z," would start after 6pm when Kids' WB would be off most affiliates. (And now that we've reported this we hope that this policy gets shoved out the door. At the very least we would expect that "Dragonball" and "Dragonball Z" get moved up to 5pm to get maximum benefit and lift the average for the block. The only exception to this would be if these shows would make the perfect lead-ins to whatever the network programs for early primetime.)

Executives and staff members at the Cartoon Network & WB TV insist that that the Cartoon Network has complete freedom in making their decisions. But some of the executives were making these same statements just about a year ago when WB TV came in and took over. Further, some staff and execs insist that Viacom's entry into their field has nothing to do with their recent decisions. Some cite the failing ratings, the departure of Gerald Levin, or give credit to Ted Turner. Whatever the reality we hope that Kids' WB and the Cartoon Network's ratings both go up, and with "Sailor Moon" on the air.

The Cartoon Network intends to run features this summer but, as of this writing, still hasn't scheduled them. For months (way before all these changes) the network was planning on repeating the 3 Sailor Moon features this summer. The latest word is that they hope to program them for July.

Another big change that is being talked about (and we hope to see soon) is the return of a bigger acquisitions budget (to get series such as "Sailor Stars") and an acquisitions executive who would report exclusively to the Cartoon Network. TNN is gearing up in all sorts of ways and we would hope that the Cartoon Network would be allowed to rise to the challenge.

In the long-term, AOL needs to address the marketing problems with their networks. For example, the Boomerang network could easily host a block for any new 2-11 productions, while the Cartoon Network could host older skewing blocks. Or maybe some animation could move to TNT or a new network (like an all-anime network) could be created? Compare Viacom to AOL/Time Warner. Viacom's networks are clearly defined, while some of AOL's (are more compact & economical but) are less targeted.

Within the next few weeks we'll be doing some targeting of our own. It finally looks like the stage has been set for our "Sailor Stars" campaign to begin! Let's see, should we go for the Cartoon Network, TNN, or perhaps there's still yet another suitor--ready to make their move?! Stay tuned!

Happy, Waving, Chibi-Sailor Moon

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