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Cartoon Network gambles on live action

It's moving away from its animation roots -- under the guidance of Rob Sorcher, who helped AMC develop 'Mad Men' and 'Breaking Bad' -- but almost all its new reality shows are flopping.

August 17, 2009|Joe Flint

When 14-year-old Ashley Rosario went looking for her favorite Cartoon Network shows such as "Chowder" and "The Marvelous Misadventures of Flapjack" and instead found reality programs, she did what any normal teenager does these days. She made a video complaining about it and posted it on YouTube.

"I'm scared for Cartoon Network," said Ashley, of Melbourne, Fla., adding that she was "outraged" by the channel's new direction and that she wasn't "the only one who feels this way."

She's right. Since launching several live-action reality shows in June and moving away from its animation roots, Cartoon Network, which is owned by Time Warner Inc.'s Turner Broadcasting, has been playing a game of hide-and-seek with its audience. Few of its new shows -- which include "Survive This," a knockoff for kids of CBS' "Survivor"; "The Othersiders," about a bunch of paranormal-obsessed ghost-hunting teens; and "Brain Rush," a quiz show with contestants on roller coasters -- are catching on with viewers, and none are among the network's top 10 series. Only one -- "Destroy Build Destroy," whose title is self-explanatory -- is gaining any traction.

Cartoon Network's audience has been declining for years. From January to August, the network averaged 370,000 viewers ages 9 to 14 in prime time -- a drop of 30% from four years earlier, according to Nielsen Media Research. The new shows haven't reversed the slide. In July, the network had the fewest viewers in that target age range since May 2000 and its least-watched month overall since June 1998.

There is internal tension as well, with many veteran animators either quitting or being handed their walking papers. There are even whispers inside the channel's Burbank animation studios that the network might drop "Cartoon" from its name.

"It's a little sad. . . . Cartoon Network had something really unique," said Craig McCracken, creator of "The Powerpuff Girls" and "Foster's Home for Imaginary Friends," two of the network's most popular shows. McCracken recently left the network after working there 17 years because he no longer has any shows in the works there.

Simply being unique isn't cutting it anymore for the brass at Cartoon Network. Launched in 1992 on the back of the Hanna-Barbera library, Cartoon Network has struggled to stand out against rivals Nickelodeon, Disney Channel and Disney's new XD network. With its quirky and somewhat subversive animated shows, including "The Grim Adventures of Billy & Mandy" and the slapstick "Ed, Edd n Eddy," Cartoon Network has also been a tough sell to parents and even kids.

"Mean and nasty" is how Stuart Snyder, the Turner executive who oversees Cartoon Network, describes audience feedback about the network's programming after he joined the company in 2007.

The move toward live-action and reality shows with a tilt toward preteen and teenage boys is not happening on a whim. Snyder said the network's research told him that kids want a diverse slate of content. "Our network was 100% cartoons, and our audience is saying we also want to see ourselves," he said.

There are financial considerations too. Although Cartoon Network is profitable, it pales in comparison with Nickelodeon and Disney Channel.

According to industry consulting firm SNL Kagan, Cartoon Network will have operating revenue of $591 million and cash flow of $328 million this year, compared with $1.9 billion in operating revenue and $1.2 billion in cash flow for Nickelodeon and $1.2 billion in operating revenue and $646 million in cash flow for Disney.

Of Cartoon Network's $591-million operating revenue, $197 million is from fees that cable and satellite operators pay to carry the channel; the rest is from advertising and ancillary revenue.

Furthermore, advertisers that used to spend heavily on kids' programming are cutting back, particularly snack and beverage companies that are sensitive to criticism about hawking junk food to children. Soft drink makers stay away from practically any program geared toward kids.

In 2006, Coca-Cola Co. and PepsiCo Inc. spent almost $5.3 million on Cartoon Network, but last year neither bought a single ad, according to industry research firm TNS Media Intelligence. Burger King spent almost $6 million on the network in 2006 but only $2.3 million in 2008, and cereal giant Kellogg Co. lowered its spending from $21.7 million in 2006 to $11.9 million last year. Some of these advertisers have also cut their spending on Nickelodeon.

"We have seen the trends," Snyder said. "We believe that by diversifying and providing more live-action or even sports content, we will have the ability to deliver new advertisers to the network." In particular, he wants to target electronics and technology companies because children have become big consumers of cellphones and video games and often are texting, gaming and watching TV at the same time.

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