Cartoon Network: Are Ratings Suffering Due to Netflix Deal?

An analysis of ratings for Turner’s Cartoon Network suggests that children’s cable programmers may be suffering as a result of Netflix deals. At the beginning of 2013, Turner solidified a deal with Netflix that included shows on Cartoon Network and Adult Swim. Since Cartoon Network content became available on Netflix at the end of March, data has revealed that ratings in Netflix households have been 10 percent lower than those of non-Netflix households.

“If there was anybody out there who still didn’t believe that SVOD hurt kids ratings, this should put a final end to that debate,” writes Sanford Bernstein analyst Todd Juenger.

Cartoon Network’s ratings have dropped 23 percent from April to July on a year-to-year basis, while July ratings were down 40 percent from the year before.

“In a statement, Cartoon Network said it had previously assumed that providing kids content to Netflix would cause a decline of 3 percent to 5 percent in viewership nationally,” reports Variety. “In fact, the Bernstein report shows that overall, the network’s ratings dropped overall by 3 percent because of Netflix, based on the assumption that 30 percent of Cartoon’s viewers subscribe to the service.”

“Our own more recent analyses and the most recent Bernstein analysis confirm a national impact of about 3 percent” because of Netflix, said Cartoon Network.

Moreover, the network has explained that other rating declines are a result of the cancellation of such hits as “Ninjago” in the first part of 2013. The network is releasing new shows to compensate, such as “Uncle Grandpa.”

“Juenger has floated the hypothesis that Netflix deals are a bad bet for kid TV nets before,” explains the article. “In an April 2012 report, he found TV ratings among Netflix subscribers grew year-over-year 2 percent for Viacom networks and 6 percent for Disney’s — compared with ratings increases of 6 percent for Viacom and 11 percent for Disney in non-Netflix households.”

However, it is possible for TV ratings to improve when past seasons of a show are available on SVOD. For instance, “Breaking Bad” grew by 50 percent in season 4, and viewership for season 5 is continually rising. All previous seasons of the show are currently available on Netflix streaming.

“For Cartoon, the tradeoff of lost TV audience versus incremental subscription VOD revenue is probably slightly positive as the network appears to be making a few million dollars net from the Netflix deal,” explains Variety.