Is SpongeBob SquarePants losing popularity?

David Brancaccio May 3, 2012

David Brancaccio: There’s word this hour that Viacom made a lot more money than expected in the last three months. Digital licensing of TV shows and movies helped and there’s more money coming in from cable and satellite fees. Its stock is currently up 3.1 percent. But at Viacom’s Nickelodeon channel, there are on-going concerns about what had been for years a cash cow or a cash sponge. Turns out one of the most lucrative characters in children’s television, SpongeBob SquarePants, may be losing popularity. Todd Jeunger is an analyst who follows these matters at Sanford Bernstein in New York. Good morning, Mr. Yanger.

Todd Jeunger: Good morning, David.

Brancaccio: SpongeBob, what, is falling a little out of favor? There are signs that maybe kids are less interested?

Jeunger: SpongeBob is getting a little old. SpongeBob has been around 13 years and even though a new crop of 6 year olds comes along every couple of years, it’s hard to keep SpongeBob fresh for that long.

Brancaccio: So you think there’s a possibility that SpongeBob‘s name will show up in the corporate profits report from Viacom?

Jeunger: SpongeBob will have his fingerprints all over the report for sure. Because Nickelodeon’s ratings have been suffering severely and since SpongeBob is such a big part of the Nickelodeon network, that’s a big deal for people who follow Viacom as a company.

Brancaccio: So as Nickelodeon’s ratings seem to ebb, who’s the beneficiary?

Jeunger: Well part of the answer is other kids’ networks. So the Disney networks are up. Cartoon Network, which is owned by Time Warner, Inc., is up. Some of it seems to be that maybe kids are watching SpongeBob, they’re just watching it on Netflix instead of watching it on the regular Nickelodeon TV channel. Nickelodeon has made the choice to put some of the older episodes of their premium content on other platforms and some of these platforms work really well for kids. So that’s a trade off that sometimes looks good in the short term because Netflix is paying Viacom a lot of money for the rights to that stuff, but in the long term you’ve got to weight the pros and cons of that because if it is true that that’s hurting the audience of the traditional network, that’s very bad in the long run.

Brancaccio: Todd Jeunger, an analyst with Sanford Bernstein, thank you very much.

Jeunger: Thank you, my pleasure.

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