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Mergers giving kids a reason to sleep in on Saturdays?

There's no question that mergers are big business in the kids broadcast world right now. Being able to offer a wider reach across a greater number of cross-promoting services is key to attracting the almighty (and increasingly elusive) advertising dollar--and merger players are excelling at the game.
September 1, 2001

There’s no question that mergers are big business in the kids broadcast world right now. Being able to offer a wider reach across a greater number of cross-promoting services is key to attracting the almighty (and increasingly elusive) advertising dollar–and merger players are excelling at the game.

At this year’s soft kids upfront, where it was difficult enough just to meet last year’s ad commitment totals, Cartoon Network finished US$10 million up, and its new cohort under the AOL-Time Warner merger, Kids’ WB!, was just marginally down from last year. Nickelodeon and CBS, which were indelibly linked by a Viacom/CBS merger in September 1999, both posted strong results; Nick achieved the highest ad sales in the kids market at US$300 million, and CBS came to the bargaining table with Saturday morning ratings that had increased by 267% since it started airing Nick Jr. last fall. And although its buyout of Fox Family Worldwide was announced as the kids upfront was winding down at the end of July, Disney had a much stronger presence at market this year than it has in the recent past, and media buyers showed a lot of interest in the potential of its newly acquired holdings.

Clearly, mergers are good for the bottom line–there’s no denying that. Making a partner out of a competitor will increase your share of the pie every time, and being able to consolidate overlapping infrastructures can significantly cut down on operating costs. But healthy competition is the driving force behind higher-quality end-product–whether you’re talking about cell phone service, computer software or kids TV schedules, this is a business principle that can be applied to any industry.

Corporate consolidation results in fewer product choices for the consumer–in this case, kid viewers–and we’re already starting to see the results on the dial.

Take Saturday mornings as an example. Once the bastion of kids television, Saturday mornings used to see each and every broadcaster pull out four hours of primo programming for kids six to 12–we’re talking the newest and best toons competing in an all-out war for kid ratings. It’s an entirely different story today. With post-merger partners being careful not to step on each others’ toes, the total kids audience has been politely carved up into so many niche targets that there are never more than a few outlets competing for the same demo.

The prize for the strangest Saturday morning development has to go to the AOL-Time Warner family. While Kids’ WB! is packing its usual power punch with a roster of new animated series on deck, Cartoon Network appears to be bowing out of the kids race, going with a Looney Toons lineup designed to appeal to ‘fans of classic animation’–which can only be interpreted as adults. Nick and CBS have opted to split their take down the middle, with Nick offering staple toons like Catdog and Rugrats for the six to 12 set and CBS taking preschoolers with the Nick Jr. block. It seems likely that the Mouse House will adopt a similar approach down the road when ABC Family launches. Bolstered by a tween-skewing library acquired with the Fox Family Worldwide assets, ABC Family seems poised to target young teen viewers, leaving ABC unfettered access to core kid viewers with Disney’s One Saturday Morning block.

Across the board, more channels have shifted their focus away from Saturday mornings as the natural platform for launching new shows. And although this shift can be largely attributed to clever niche strategy and the availability of more kid slots in the afternoon and prime time (which, in itself, is a good thing), I’m sure thunder-stealing concerns have entered into the equation for merger players of late.

I’m not ready to sound the alarm bells just yet, but diminished competition tends to breed complacency and a decreased incentive to create innovative product. Over time, will this lead to a kids marketplace in which mediocrity is the standard? Hopefully not, but it does give one pause to think.

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