Nickelodeon is averaging 918,000 viewers a day among children ages 2 to 11 years old in the fourth quarter through Dec. 15, the company said, citing Nielsen data. The Disney Channel is averaging 874,000 viewers in the same period.
The ratings shift, led by new hit shows such as “Paw Patrol,” is generating accelerating ad sales for New York-based Viacom, which posted its best quarterly growth in at least two years last month. The battle between the largest players in children’s TV intensified last year after the debut of Disney Junior, a channel aimed at preschoolers who watch Nick Jr.
“If you invest more in programming it helps,” said Tony Wible, an analyst at Janney Montgomery Scott LLC in Philadelphia who recommends buying Viacom shares. “There’s no doubt that they’re gaining momentum after losing some ground in what’s been a much more competitive market.”
Nickelodeon has registered 10 months of ratings growth, Viacom Chief Executive Officer Philippe Dauman said at the UBS Global Media & Communications conference on Dec. 9. The company is controlled by Chairman Sumner Redstone.
New animated shows include “Paw Patrol,” about six heroic puppies and their 10-year-old leader, a boy named Ryder, and “Sanjay and Craig,” featuring a 12-year-old Indian American boy and his friend, a talking snake.
Children’s programs are lucrative because companies can sell merchandise tied to characters and establish long-lasting consumer loyalty. Disney Junior shows such as “Doc McStuffins” and “Sofia the First” tallied more than $1.8 billion in sales for retailers in the company’s latest fiscal year, Chairman and Chief Executive Officer Robert Iger said on a Nov. 7 call. That was more than double the prior year.
Nickelodeon is expected to register 12 percent growth in advertising and cable subscriber revenue this year to $1.77 billion, according to estimates from researcher SNL Kagan. Viacom’s 10 percent growth in ad sales last quarter was its best in at least two years. Disney Channel’s subscriber revenue is forecast to grow 5.4 percent to $1.36 billion.
Disney Channel, which doesn’t sell ads, focuses more on yearly results and on narrower audience groups, such as children ages 2 to 5, according to Patti McTeague, a spokeswoman.
“Disney Channel is not advertiser supported,” McTeague said in an e-mail. “Kids 2-11 is a broad demographic utilized by advertisers and 4Q is critically important in the kids advertising business.”
“Paw Patrol” is averaging 844,000 viewers in the ages 2 to 5 group this quarter, according to Nielsen data supplied by Nickelodeon.
“SpongeBob SquarePants” was fired and rehired in a special episode “reflecting current times,” Dauman said. “Dora and Friends: Into the City,” a spinoff of the 13-year-old “Dora the Explorer” show, features a slightly older Dora “which will give us a whole new line of consumer products,” Dauman said.
Viacom Class B gained 1.6 percent to $83.55 at the close in New York. Shares of the company have risen 58 percent this year. Burbank, California-based Disney advanced 2.2 percent to $72.20, a new all-time high, and has gained 45 percent this year.
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