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
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!
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.
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 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.
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.
Viacom Wants You, Regardless of your Age
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?
Let the Floodgates Open!
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."
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!