How Spongebob Became an $8 Billion Franchise

Beloved TV Character Celebrates His 10th Birthday, Iconic Status

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NEW YORK (AdAge.com) -- On July 17, SpongeBob SquarePants will reach a milestone that few TV characters rarely get to celebrate: a 10th birthday. But beyond just TV longevity, SpongeBob SquarePants has grown into a nearly $8 billion-dollar-a-year property at retail for Nickelodeon, with more than 700 license partners worldwide, making it the most widely distributed franchise in MTV Networks history, hands -- or pants, as it were -- down.

SpongeBob
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SpongeBob by the numbers
But like "The Flintstones" and "The Simpsons" before it, "SpongeBob" has found that the secret to its success lies in its cross-generational appeal. It entertains just as many kids as it does college students and adults with an appreciation for slapstick sponge humor and aquatic double entendres. That demographic transcendence has helped "SpongeBob" maintain its status as the most-watched show on cable, accounting for as much as 30 of the 100 top-rated shows in any given week in Nielsen's cable ratings, as well as the top-rated animated show among kids 2 to 11 for the past seven years.

"I'm not surprised at all that SpongeBob is an icon for our time. Just ask Johnny Depp," said Judy McGrath, chairman-CEO of MTV Networks, referencing the star of "SpongeBob vs. The Big One," a TV movie special that pulled in 5.8 million viewers in April. "Even our president mentioned him as one of his favorites. Bob is unflappable, uninhibited and unstoppably optimistic. The Sponge reaches across every audience we serve, so we're jumping at this opportunity to celebrate him across the house."

"SpongeBob," created by Stephen Hillenburg and voiced by Tom Kenny, was as close to out of the box as Nickelodeon could have asked for at the time. Although it debuted to middling ratings in July 1999, it soared past "Rugrats" as the network's highest-rated show of all time within a year. By 2001, SpongeBob was starring in his first "Got Milk?" ad, followed by three more years of growing popularity, which resulted in the $86 million-grossing "SpongeBob SquarePants: The Movie." It was around that time the licensing blitz took off, as SpongeBob paired with everyone from Paramount to Burger King to Hasbro and becoming the top licensed character for adult and children's apparel.

But Pam Kaufman, Nickelodeon's chief marketing officer, said she feels like the franchise is still just gaining momentum. "Someone said to me a couple weeks ago, 'Aren't you worried about burning this thing out?' I said, 'Yes, I was worried four years ago,'" she said. "We're having a great time with the 10th anniversary, so this is not the end by any means. It's just the beginning. No other property in its history over time is still where it is today like 'SpongeBob.'"

The 'oh my God' moment
Ms. Kaufman oversaw the airing of the first global tent-pole event in 2006, "SpongeBob: Lost in Time," which drew 8.6 million total viewers and a 16 share for kids 2 to 11, luring a large international audience as well. "That's when our jaws pretty much dropped. That was an 'oh my God' moment," she said.

Robert Thompson, director of the Bleier Center for Television and Popular Culture at Syracuse University, summed up the ascent of SpongeBob even more succinctly: "For kids, I would put SpongeBob in that rarefied category that includes the Sesame Street universe and the Disney universe," he said. "If you add up the total number of episodes in only 10 years, that's a relatively small body of work, and SpongeBob has managed to infiltrate the culture of childhood and American life at large that few other things have done."

That's why Nickelodeon is committed for the long term, with plenty of new episodes coming for the next couple of years, even as repeats continue to draw upward of 3 million viewers apiece. "It's still a very important property for us," Ms. Kaufman said.

Not least of all because of the ads it attracts. From 2004 to 2008, the little yellow guy's show has brought in $813 million in ad revenue for Nickelodeon, according to TNS Media Intelligence.

A BIG FAN: NBA star LeBron James is one of SpongeBob SquarePants' many celebrity admirers.
A BIG FAN: NBA star LeBron James is one of SpongeBob SquarePants' many celebrity admirers.
Nickelodeon is already halfway through a yearlong marketing blitz to tout the "SpongeBob" anniversary, beginning with a PR blitz at the Sundance Film Festival, where stars were feted with limited-edition, 12-carat diamond SpongeBob pieces from Simmons Jewelry. The company's president, Scott Rauch, said blinged-out SpongeBob earrings, necklaces and rings will soon sell at retail for $95 to $350. "When you get a character like SpongeBob, especially when people are feeling down, it's nice to get a piece that's recognizable, makes you feel good," he said.

The celebration continued with a retail partnership with Walmart stores that gave the character valuable front-of-store real estate for the month of March. A month later, Burger King kicked off its latest tie-in with the character, with sales outpacing the number of Kids Meals sold during previous SpongeBob promotions the fast feeder has held since 1999. "[The] staying power of the property is second to none," said Cindy Syracuse, senior director-cultural marketing for Burger King. "The most striking example of its popularity occurred in 2004, when our oversized SpongeBob inflatables were stolen off of the rooftops of numerous restaurants nationwide. The 'Spongenappings' ignited an inflatable frenzy among fans and the media."

Other stunts in the coming weeks will include SpongeBob ringing the closing bell at the New York Stock Exchange on July 16; a global tour of six 8-foot SpongeBob statues in 12 countries; the July 18 premiere of "Square Roots," a documentary about the show's origins; and SpongeBob becoming the first animated wax figure at Madame Tussauds museums worldwide.

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