A Tale Of Two Tiny Cities

Cable World, Sept 9, 2002

Byline: JONATHAN BLUM, KAGAN

Cable does a terrific job of snaring the young viewer. But there seems to be a limit as to how many programmers the medium can support. There is no doubt established services like Nickelodeon, Cartoon Network and the Disney Channel are thriving. The Viacom service led all of cable in full-day households this past summer with a solid 1.8 rating, and the Cartoon Network's cash flow margin was 20.3% higher than the industry average year-to-date in 2002. But new upstarts are facing a longer haul. Much of the off-the-shelf syndicated fare like The Beverly Hillbillies and Space Ghost that is core to kid programmers' healthy cash flow is already being shown by established networks. This leaves the newer services to develop their own programming (and if TV industry norms apply, 80% to 90% of new shows fail and will need to be replaced) and to create their own brands. And MSOs are presenting a new, stouter attitude towards affiliate license fees: ABC Family has become the poster child for rate rollbacks. Meaning, while cable will remain the destination for children's TV, existing programmers will flourish and newer offerings will require greater patience from their backers.