The annual flurry of ad space buying known as the kids upfront is almost upon us, and with it, a strong sense of déjˆ vu. Last year’s event served as the turning point in a swing from a seller’s to a buyer’s market, and the networks and buyers are bracing for a repeat. The market is continuing to fragment with the introduction of new channels, kids Persons Using Television (PUT) figures declined, and spending by advertisers is expected to continue at about the same level. Even the timing of the upfront is expected to be the same as last year, with the buys again returning to their traditional mid-April home after several years of being pushed up to February by the cablecasters.

Media buyers have been watching the networks closely for the past year, and have already established their picks and pans.

‘Everybody really dropped from a year ago except Cartoon Network,’ says Active International’s senior VP, media services, Tom Horner, ‘but within that, you still have Nickelodeon coming out number one and being really strong, Fox [Kids] still being a network that gets good boys audiences, and ABC being a network that gets a good girls skew.’ Ammirati & Puris/Lintas buyer Gary Carr adds that Kids’ WB! is down again this year, Fox Family didn’t fare as well as predicted (despite launching in 72% of the country), and syndication is continuing to be ‘kind of low rated.’

Cartoon Network is the exception this year, the only player to show growth in a year marked by ratings declines. Nielsen figures show a 0.3 increase in the channel’s ratings for kids ages two to 11 in fourth quarter 1998 over 1997, and the channel claims total day household delivery gains in the same demographic of 27%. ‘Cartoon seems to be continuing their growth-they’re in a similar position to the one Nick was in a few years ago,’ says Carr. ‘They’ve exhibited some decent growth, a lot of it due to better penetration of the country, and that’s where a lot of their growth will continue to come from.’

In fact, Cartoon grew total day household delivery by 28% in 1998, bringing total distribution up to 55 million homes. ‘We’ve grown over the past several years, but just in terms of hitting a stride and a momentum, we really hit it last year,’ says executive VP Rob Sorcher. ‘The ratings showed it, the delivery of kids showed it-every indicator is up.’ He is also quick to point out that the 38% delivery gain among kids ages six to 11 outstrips its distribution gains, showing that kids are also watching more in households the channel already services. Buoyed by this success, Sorcher’s even talking of taking on the kidcaster king. ‘We’re beyond a must-have cable network, we’re really nipping at their heels, we’re coming up right behind Nickelodeon,’ he says. ‘We just keep crystallizing and becoming more and more powerful, and the gap will close. It’s already closing.’

But Nick isn’t ready to hand over the crown just yet. ‘It’s a huge gap,’ says Nick’s senior VP of advertising sales, Sam Moser. ‘Our national ratings are double theirs. They’ve done a good job, but double is a long way to go. And we’re in 75% of the country, and they’re in 54% or something like that, so that’s another gap to overcome.’ Nickelodeon still reaches by far the most kids weekdays, and over the last year, it has reclaimed a lead it used to share with Fox Kids among kids ages two to 11 on Saturday mornings. As well, the cablecaster dominated the top 10 in individual kids program ratings for fourth quarter 1998, with Rugrats holding number one with a 3.1 average rating among kids ages two to 11 and hitting a record-breaking ratings high of 3.8 in January with the ‘Baby Dil’ episode. So not only is Moser not apologizing for Nick’s drop in ratings, he’s talking about raising CPMs (cost per thousand).

He says that a combination of a drop in ratings over almost all of the networks and a new influx of advertising money into the US$750-million kids upfront market will push up the CPMs. He reasons that the overall ratings drop makes it more difficult for advertisers to reach audience goals, and that ad money from new categories such as travel, footwear and beverages, which were once the domain of teens and adults only, will bolster demand. ‘I think CPMs will definitely go up,’ he says, ‘and I think budgets will go up, and I think the overall kids marketplace, in terms of dollars, will go up.’

But in a market where rates are set by supply and demand, most buyers say that the demand predicted by Moser won’t materialize, and the supply is bigger than he thinks. ‘I haven’t heard any indications of any big new increase in advertising dollars or any big new categories,’ says Ammirati & Puris/Lintas’s Carr, ‘and you still have a fair amount of supply.’ Carr says that the introduction of new channels, such as Fox Family and Fox’s planned Boyz and Girlz channels, is more than making up for the loss of supply through lower ratings. ‘It’s always good to have a lot of players with the dollars staying relatively constant,’ he says, ‘because that means dollars stay under control. Any time you have a lot of players competing, it’s good for the buyer.’

Active International’s Horner agrees with Moser that with less gross rating points to sell overall, ‘it sort of creates a tightness to the market,’ but disagrees that there will be more ad dollars spent this year. ‘I think it will be lower,’ he says, ‘and that’s really because Mattel’s forecasts are down from a year ago. Even with the cereal companies, they’re having problems at Kellogg’s, so I don’t see that they’re going out there and spending a lot of money.’

While as the top kidcaster, Nick can afford to remain bullish about the market, most of the remaining networks, including broadcasters ABC, Kids’ WB! and Fox Kids, are struggling to put a positive face on their ratings declines. Only CBS, largely relegated to the sidelines in recent years thanks to poor ratings, showed an increase, likely due to the complete overhaul of its Saturday morning block last October. The new schedule saw every one of the live-action shows making up the 1997-98 schedule dumped and replaced with an all-Nelvana-produced animation lineup. Going into the 1999-2000 season, CBS is hoping to keep up the ratings momentum by sticking to the all-Nelvana formula. However, three of the old series will be replaced by new Nelvana animated series Blaster, The New Tales From The Cryptkeeper and Rescue Heroes.

Of the three broadcasters that suffered a loss over the last year, ABC seems to have endured it best. The two-hour Disney’s One Saturday Morning block is still doing well, with the last three half-hour segments consistently achieving kids two to 11 ratings in the low- to mid-four range. Senior VP and GM of children’s programming Jonathan Barzilay notes that the success of the block has spilled over into the new year with ABC still outperforming Fox Kids, and slowly bringing its female skew closer to a 50-50 male-female split. About the fourth-quarter 1998 0.3 ratings drop in kids ages two to 11, Barzilay says, ‘we faced both sports pre-emptions and this year, we had some news pre-emptions, because of the [Clinton] impeachment proceedings, and that may have had some effect.’ He also admits that ‘the growth of cable services, such as Disney Channel and Cartoon Network, could be a factor overall.’ All in all, though, Barzilay says he is happy with ABC’s programming schedule, and apart from introducing a new animated version of ABC’s TGIF show Sabrina, he ‘doesn’t anticipate too much in the way of change.’

Over at the WB, executive VP of media sales Jed Petrick is coming to terms with a disappointing 19% drop among kids ages two to 11 compared to last season, and is focusing on changes designed to boost ratings in the future. ‘This is not easy,’ he says. ‘It’s been a tough fourth quarter for us, as we all know, and I think this business of building this network has been a lot more difficult-not just on the kids front, but overall-than we thought going in.’ However, he points out that the hiring of Donna Friedman to run the Kids’ WB! network and the appointment

of Susanne Daniels to entertainment president of the parent network will add much-needed assistance to Jean MacCurdy, who was almost single-handedly running the kids network from Warner Bros. Television Animation. The broadcaster is also moving the kids block in-house so it can occasionally look outside the Warner catalogue for shows such as Pokémon, which Kids’ WB! suddenly acquired from 4Kids Entertainment late last January. Then there’s the possibility that Kids’ WB! could commission new work from Marquee Tollin/Robbins, the hot production company responsible for several hit kids shows, including Nick’s Kenan & Kel. In February, Warner Bros. signed a two-year deal with the production company that would result in Warner supplying a yearly US$1.5-million discretionary fund package for the development of prime-time and kids shows.

Petrick says that things are beginning to pick up for Kids’ WB!, with new show Batman Beyond already pulling in decent ratings, and adds that as a national broadcaster, the WB fulfills some advertising needs that cablecasters can’t. Looking to rival Fox Kids, Petrick says that Fox Kids’ recent decision to drop its weekday morning-hour kids block may be the first step in a plan to leave weekdays altogether. ‘You have to wonder how long Fox will remain in the weekday afternoon broadcast day part,’ he says. ‘If they do go away, then you’re going to have a Kids’ WB! franchise in place with solid entertainment that should capture kids.’

Asked if Fox Kids is indeed considering dropping weekdays altogether, Fox Family’s VP of corporate communications, Barry Stagg, says, ‘Absolutely not. Fox Broadcasting continues to be committed to the kid business. The affiliates signed a 10-year carriage agreement with Fox Kids just last year.’

Despite Fox’s proclaimed commitment to its affiliates, the fact that the affiliates cheered when the network announced it was dropping the weekday morning hour at NATPE is a reminder that ratings at the kidcaster are suffering. Fox Kids endured an 18% drop among kids ages two to 11 in fourth quarter 1998 over 1997, and this, coupled with the fact that Fox Family has struggled with large ratings fluctuations since its inception, has made for a less than satisfactory year.

President of Fox Family advertising sales Rick Sirvaitis counters the bad news by saying he expects ratings to increase for Fox Kids next year, and that Fox Family is still in the process of establishing itself. ‘We’ve been on track in terms of our viewers per viewing household from day one at Fox Family Channel,’ he says. ‘It’s just a matter of increased household awareness and getting kids to check us out.’

To that end, Sirvaitis says the cable channel will be introducing three new shows for 1999 with the hopes of establishing more of a personality for the channel. Angela Anaconda (Decode in Canada), Rotten Ralph (Italtoons in New York, the BBC in the U.K. and Ravensburger in Germany) and Weird-Ohs (Mainframe Entertainment in Canada) will be joining programming such as Three Friends and Jerry, and Sirvaitis says the ‘unique animation style’ of the new shows will ‘stop people who may be channel surfing to check us out.’ Sirvaitis also says the channel will be doing more multiple runs of successful shows and will focus on the 3 p.m. to 6 p.m. Basement time slot, currently the channel’s strongest block.

While the decline in ratings for the three broadcasters could be pinned on the now indisputable trend of kids switching to cable, the decline in ratings over both broadcasters and cable channels may be attributed to a ratings redistribution over an increasing number of outlets and a pool of kid-viewing hours that’s continuing to shrink.

About the fragmentation of the kids viewing market, Griffin Bacal president Paul Kurnit says, ‘it’s just indicative of where TV overall is going. The days of the mass audience, unless you’re running the Super Bowl or you’ve got a [series] like Seinfeld, are going to be fewer and farther between.’ This is echoed by Fox’s Sirvaitis and Cartoon Network’s Sorcher. Sirvaitis notes that Fox is handling the fragmentation by launching new channels for the new delivery systems as they’re introduced. Cartoon’s Sorcher says, ‘We’ve got the greatest assets of any of these companies to do that with,’ and in fact, it has been reported that Turner Broadcasting System is planning to launch a digital channel version of Cartoon Network in the fourth quarter of `99, although there’s no official confirmation yet.

Both buyers and networks agree that this fragmentation is favoring the buyers, but the falling kids PUT figures are a little more contentious (see KidScreen’s February 1999 issue, ‘Declining kid TV viewership,’ page 18, searchable at www.kidscreen.com). Kurnit says that the figures are misleading because this year’s 9% decline consisted almost entirely of kids watching less adult-targeted programming, rather than watching less programming for kids, but at the same time, he admits that kids have many more entertainment options than they did 10 years ago. As for the effect of the highly publicized PUT decline on the upfront, Kurnit says it’s anyone’s guess. ‘As in all things, it’s a negotiation. The networks and cable stations will say `it doesn’t matter that PUTs are down, our ratings have held up,’ and the agencies will say `show me-I don’t believe you.’ And they’ll both be right, and they’ll both be wrong. Because at the end of the day, as with any negotiation, the agreement is not about truth; the agreement is about what price each side is willing to pay or accept.’

Kidcaster

ratings at a glance

Ratings for kids ages two to 11 Mon. to Fri. daytime (7 to 9 a.m. and 3 to 5 p.m.)

Network 4th Quarter `97* 4th Quarter `98* Difference

Cartoon Network 0.6 0.9 +0.3 (+50%)

Fox 2.2 1.8 -0.4 (-18%)

Fox Family – 0.3 –

Nickelodeon 2.5 2.3 -0.2 (-8%)

The WB 1.0 0.8 -0.2 (-20%)

Ratings for kids ages two to 11

Saturday morning (7 a.m. to 1 p.m.)

Network 4th Quarter `97* 4th Quarter `98* Difference

ABC 3.5 3.2 -0.3 (-9%)

Cartoon Network 1.1 1.4 +0.3 (+27%)

CBS 0.6 0.8 +0.2 (+33%)

Fox 3.8 3.1 -0.7 (-18%)

Fox Family – 0.4 –

Nickelodeon 3.8 3.5 -0.3 (-8%)

The WB 2.1 1.7 -0.4 (-19%)

UPN** 1.8 1.7 -0.1 (-6%)

* Network ratings for weeks one to 14, cable ratings for weeks one to 13

** UPN ratings for Sunday morning (9 to 11 a.m.)

Source: Nielsen ratings from TN Media’s December 1998 issue of Kids Beat

Cable

penetration

(as a % of total U.S. TV households)

Cartoon Network 54%

Fox Family 72%

Nickelodeon 75%

Nielsen ratings are the

percentage of a given ‘universe’ (defined as the total number of people in a particular demographic) watching a network or show, averaged over a particular time period. To convert ratings into the actual numbers of kids watching, divide by 100 and multiply by the total universe size. The universe for kids ages two to 11 in the U.S. is

39.4 million.