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Nickelodeon ratings plunge, hitting Viacom stocks

Nickelodeon's Dora The Explorer walks the trading floor after the opening bell as part of the NYSE Kids Day event at the New York Stock Exchange on November 25, 2011 in New York City.

Mitchell Hartman: Big trouble for the home of SpongeBob SquarePants. And no, they're not tearing down Bikini Bottom to drill an oil well. Rather his home channel, Nickelodeon, has seen a major drop in ratings in October and November. The network's been number one with kids for 16 years and more pre-teens are watching TV.

Tim Molloy joins us. He writes about TV for TheWrap.com. Good Morning.

Tim Molloy: Good morning. Thank you for having me.

Hartman: What's so stinky -- as my daughter might say -- at Nickelodeon?

Molloy: Well, the problem with Nickelodeon is they've had a very sudden, very hard to explain, ratings drop. It started in mid-September, and it's continued in October and November. And Nickelodeon is really concerned that this might be a case of Nielsen counting their viewers wrong, or undercounting them. And they point out that some other networks, including the Cartoon Network, have also had ratings slides recently.

However, Cartoon Network seems to be bouncing back -- at least, as of numbers released for November, while Nickelodeon seems to be doing worse than ever.

Hartman: So it's a classic case of blame the messenger, possibly. But, assuming the ratings drops are real, they can also have real world economic consequences for the parent company of Nickelodeon, right?

Molloy: Very much so. Viacom's stock is actually being affected by this, or at least analysts are paying attention to it. One analyst downgraded his rating on it from buy to neutral, and another has lowered his target price very slightly. But it does show you just how much tension they're paying for the ratings of this children's network.

Hartman: But aren't these things somewhat cyclical? I mean, you know, some of these shows peak, and trough, and peak again -- just on the whim of a bunch of kids?

Molloy: It's entirely possible that everybody at school started a whispering campaign against SpongeBob. But Nickelodeon has pointed out that these things tend to be very, very, very predictable. Nickelodeon has been on top for 16 years among 2-11 year olds. And for them to have a very sudden dive just in the last three months seems strange.

Hartman: That's Tim Molloy. He writes on TV for TheWrap.com, from New York. Thanks very much.

Molloy: Thank you.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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