Time Warner Blames Netflix for Kids' TV Decline, But Viacom Doesn't Budge

Any Impact Is Minimal, Viacom Says Again in Conference Call Thursday

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Viacom this morning again defended its deal to distribute kids' programming through Netflix, one day after rival media conglomerate Time Warner joined the camp pointing fingers at the streaming giant.

Nickelodeon's SpongeBob SquarePants
Nickelodeon's SpongeBob SquarePants

Without calling out Nickelodeon or Netflix by name, Time Warner CEO Jeff Bewkes said Wednesday that streaming video is certainly affecting traditional kids' TV.

"We think that the flat trend in cable viewing in total day was in kids viewing, where kids viewing went to SVOD rather than to watching the cable networks," Mr. Bewkes said during Time Warner 's earnings call with analysts, using industry shorthand for streaming video on demand.

"Now Cartoon Network was up 14%, so we didn't have that problem," Mr. Bewkes continued. "And we think part of the reason is that we don't have our programs sitting on an SVOD service where parents can park their kids in front of an SVOD. And obviously, that 's taking some viewing away from some of the other animated channels, not ours but theirs, probably for that reason."

Mr. Bewkes isn't the only one convinced that Netflix and streaming video providers are eating into ratings for children's TV. In a report last week, Bernstein analyst Todd Juenger said studying TV viewership among Netflix streamers and nonstreamers revealed that Nickelodeon's ratings had dropped 6% from the year prior among Netflix streamers, but actually grew 2% among nonstreamers.

"Turns out, Netflix streamers watch just as much traditional TV as nonstreamers," Mr. Juenger wrote in his report. "However, there is a significant share shift among streamers. Kids' networks (not just Nickelodeon) and syndicated shows are getting severely whacked."

Viacom's CEO, Philippe Dauman, said today that Nickelodeon's ratings drop reflects faulty measurement and strong competition on rival networks.

"There's been a lot of focus lately by a particular analyst which has reverberated elsewhere about the Nickelodeon having some library content on Netflix in particular," Mr. Dauman said during Viacom's earnings call.

"Netflix is present in less than a quarter of television households, and since we get the streaming data on our content, I can tell you that the time spent on Nickelodeon content on Netflix is approximately 2% of the time spent on our Nickelodeon channel," Mr. Dauman said. "So even if you viewed that as being completely cannibalistic, which of course it's not, it serves our customers in places who might not otherwise be able to watch television, and it does serve some promotional value."

Streaming-video-on-demand deals are also providing Viacom with "nice revenue," Mr. Dauman noted.

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