Was 2022 the Death Knell for Kids TV?
Kids cable TV channels like Nickelodeon, Cartoon Network and Disney Channel remain important brands within their respective company portfolios, generating vast profits from a combination of affiliate fees charged to all pay TV subscribers and advertising revenue.
The problem is that no one is watching anymore in primetime.
Now, it is fair to note that not all kids' cable viewing comes during primetime, as some children are already in bed. But it is equally fair to note that viewing figures used to be much, much higher during this period and have bottomed out as streaming has taken off.
Kids' primetime viewing fell by a significantly greater amount between 2017 and 2022 — by 76% — than all other cable formats: Sports and news networks are down by 19% each, channels focusing on unscripted content are down by 34% overall, and those featuring a mix of movies, scripted and unscripted are down by 38%.
Despite this huge fall in viewing, kids cable networks remain a very lucrative business for their owners. VIP+ estimates that collectively these channels brought in $3.1 billion in affiliate fees in 2022, with the Disney Channel generating $1.1 billion dollars alone (it should be noted that, unlike other networks in this analysis, Disney Channel doesn’t run ads from external advertisers and thus only has a single revenue stream).
When considering the declines in audience from the benchmark year of 2017, it is not difficult to wonder how the revenues these channels generate from cable subscriptions are so high when audiences are being shed like skin from a snake.
Nickelodeon, for example, could point to windowing new series of shows like “Paw Patrol” on its TV networks before eventually moving to streaming services Paramount+ and Noggin as reasoning for making over a billion dollars a year across its kids networks and as evidence of its commitment to cable TV.
But this strategy isn’t employed by all kids channels (see HBO Max debuting shows like “Batwheels” before the network premiere on Cartoon Network as a recent example) and speaks to the wider issue that VIP+ has often touched upon that’s facing the TV industry, which is charging more for less content while total subscribers are declining and hoping things will be fine.
The disconnect between audience size and affiliate revenue being generated is stark when comparing the percentage increases or decreases for each between 2022 and 2017. Every kids network sees double-digit declines in audience — Disney Channel saw the greatest, down by -83% in primetime versus five years ago — yet all but one saw double-digit increases in affiliate fees.
It’s hard to see a way for kids TV networks to reclaim their glory. Unlike most cable content, which if windowed along the “Yellowstone” formula would likely see audience increases, kids shows have other dynamics at play: a stubborn, immature audience used to watching what they want and one, together with parents, with very low ad tolerance (for different reasons: interruptions and exposure, respectively).
Linear TV is an outdated model for delivering content to children. But given the importance of the networks to media company bottom lines, expect to see the shift drawn out as long as possible so the affiliate-fee cow can be milked for all its worth.
