The turtles are being unleashed in the nick of time.
On Saturday mornings, Nickelodeon will take the lid off a slicker, hipper version of "Teenage Mutant Ninja Turtles."
The armed reptiles, a hugely popular cartoon franchise in the '80s and '90s, are the latest effort by the children's network to combat a dramatic ratings plunge.
Over the past year, Nickelodeon has lost 28 percent of its young audience, according to ratings firm Nielsen. The network's signature programming, "SpongeBob SquarePants" and tween sensation "iCarly," have lost cache with kids who are turning to other channels and other entertainment such as video games.
That has provided an opening for competing networks to make gains. Arch rival Disney Channel last year surpassed Nickelodeon among its target audience of viewers aged 2 to 11, shattering Nick's 16-year streak of ratings victories.
"I can't think of another instance in television history in which a network that has been so dominant for so long has fallen so far and so fast," said Todd Juenger, media analyst with investment firm Sanford C. Bernstein & Co.
Nickelodeon's ratings stumbles have captured the attention of Wall Street because the network is a crucial profit center for parent company Viacom Inc. The Nickelodeon networks, which include Nick Jr. and TeenNick, last year generated $2.5 billion in revenue for the company — and more than 37 percent of Viacom's cash flow, according to consulting firm SNL Kagan.
Although Viacom's stock has not suffered because of the market's general enthusiasm for media stocks, analysts nevertheless have become increasingly concerned about the youth defection.
With so much at stake, Viacom has thrown tens of millions of dollars into development of new programs for Nickelodeon, including the latest reboot of the masked marauders from the sewers of New York who first towered over the cartoon landscape in the 1980s.
Viacom acquired the rights to "Teenage Mutant Ninja Turtles" three years ago for $60 million and has given them an updated, computer-generated look and more contemporary cronies.
For example, April O'Neil, originally a grown-up TV reporter, is now a spunky, pony-tailed 16-year-old girl.
The network has ordered 26 new episodes of the turtles. And more new shows are on the way.
Last week, Viacom's chief executive told investors that Nickelodeon stepped up its production pipeline, and would run 70 percent more original programming during the fourth quarter than it did in the year-earlier period. Nickelodeon said that it plans to launch four new series, including "See Dad Run" with '80s heartthrob Scott Baio.
Last year, Nickelodeon spent nearly $400 million on programming, according to SNL Kagan.
The network desperately needs new animated hits that will delight young children and send them and their parents to stores to buy action figure toys, T-shirts, backpacks and DVDs.
"Content, and the creation of great content, drives everything," Viacom Chief Executive Philippe Dauman said last week during an investor conference. The company was particularly excited by the turtles' revenue prospects, he said. "We are already selling out the merchandise we are putting out there," Dauman said.
Even muscle-bound reptiles won't be enough to fend off challenges from competitors Disney Channel, Disney XD, Cartoon Network, PBS Sprout and the Hub, a 2-year-old channel owned by Discovery Communications and toy company Hasbro Corp.
Walt Disney Co.'s Disney Channel has been notching gains after overhauling its animated division in recent years. The company brought in Eric Coleman to lead Disney Television Animation four years ago. Coleman spent 15 years at Nickelodeon, where he championed such shows as "SpongeBob SquarePants."
Disney's revitalized cartoon studio produced the TV network's first $1-billion animated franchise, the abstractly drawn series "Phineas and Ferb." The show, about two step-brothers who create fanciful machines, rolled out in 2007.
While competitors ramped up, Nickelodeon continued to rely on old stalwarts, including its famous squid, sponge and starfish.
"More than 40 percent of Nickelodeon's schedule has been 'SpongeBob,'" said Brian Wieser, senior analyst at Pivotal Research Group, an equity research firm. "A workhorse would be a charitable definition of the situation, but we would call it dependency."
Three years ago, "SpongeBob" attracted 2.8 million viewers an episode during its daytime runs, including nearly 1.5 million children in Nickelodeon's target audience of children aged 2 to 11, according to Nielsen. This year, the "SpongeBob" audience had fallen to 2.1 million viewers in daytime, including 1.1 million in the 11 and under set.
Declines for "SpongeBob" in the evening, when more adults were watching, were even greater. Two years ago, "SpongeBob" episodes attracted 3.5 million viewers in the Nick-at-Nite programming block. By this year, 1.75 million viewers were tuning in at night.
Some analysts worry that Nickelodeon's declines signal a fundamental shift in viewing behavior. Many young viewers are as likely to watch streamed episodes of cartoons on their game consoles, smartphones and tablets as they are on cable TV channels. Currently, the industry's profitability depends on cable subscription revenue, a source that is threatened by the incursion of online video services such as Netflix and Hulu.
Juenger, the Bernstein analyst, made waves earlier this year when he suggested that Nickelodeon's ratings erosion was caused, in large part, by more children watching "SpongeBob" reruns on Netflix.
He and his colleagues began scrutinizing children's networks because their ratings declines were more pronounced than for channels targeting broader audiences.
Young viewers are a bellwether of future trends.
Viacom and others disagreed with Juenger's conclusions, saying he relied on too narrow a data sample.
Wieser, of Pivotal Research, doesn't buy into the "Netflix effect" as the primary cause for the network's troubles.
"It's the programming. Nickelodeon's programming just hasn't produced the ratings," said Wieser. "They have been overly reliant on just a few hits. 'SpongeBob' and 'iCarly' have gotten a bit stale and now the issue becomes whether this is a fixable problem."
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