Image: PAW Patrol, Nickelodeon
Anyone with children can tell you how passionately, obsessively and annoyingly they fall in love with certain media. Show a kid the right movie or television series at the right time in their life and your household becomes a shrine to that property; 24/7 airings on all screens and must-have merchandise littered about floors and countertops. Pretty much every one went through one of those phases (I, for one, would like to take this opportunity to thank my parents for buying me every action figure, trading card and T-shirt from the Pokemon,Yu-Gi-Oh! and Dragon Ball Z franchises). Kids media is voluminous and — not to get too cynical — it can garner reliably repeatable audiences and transmedia consumers.
So why isn’t anyone talking about just how valuable Nickelodeon has the potential to be in the ongoing Paramount Global sweepstakes?
For anyone who doesn’t know, the conglomerate is currently weighing two separate takeover/merger bids: one from David Ellison’s production company Skydance Media (backed by RedBird Capital) and a joint effort from Sony and private equity firm Apollo Global Management. While plans for the future remain uncertain under either leadership, it is widely believed that the latter team would be more likely to sell off several brands within the company. Considering Paramount Global’s recent executive team reportedly declined multiple billion dollar offers for Showtime and BET, despite $15 billion in debt and a sinking share price, it’s reasonable to believe some cash-generating efforts are to come regardless who “wins.”
Nickelodeon, whether kept in-house or shopped on the open market, remains an undervalued asset thanks to the brand’s ongoing dual cast contributions and the industry-wide importance of kids media and IP development.
Kids Content Delivers on Linear & Streaming
Would you be surprised to learn that, according to Parrot Analytics, Nickelodeon is responsible for about one-fourth of all audience demand for Paramount+’s TV catalog? This easily makes it the platform’s top contributor, ahead of CBS and Paramount+ originals.
Perhaps you’re not too blown away by this considering that 60% of all Netflix households worldwide watch Kids & Family content every month (both licensed and original programming) and Cocomelon and Bluey are two of the biggest TV shows in America, regardless of genre. Kids content is remarkably popular! But still, this underscores Nickelodeon’s value proposition.
Despite the decline in linear TV — which has absolutely hits kids programming hard — its broad reach remains a helpful launching pad for younger-skewing properties. The average demand for the 10 most in-demand linear kids shows worldwide from January 1, 2023 to April 21, 2024 is 42.87 times greater than the standard show in that span. The average for digital original kids shows in that range is a still respectable but significantly smaller 15.34x. Nicolas Eglau, Managing Director for Moonbug Entertainment’s EMEA and AsiaPac divisions, pointed out that linear networks remain key access points for many non-English speaking countries such as Malaysia, Indonesia and Turkey. If there’s one thing modern media companies love, it’s a global footprint.
Parents trust linear kids programming and the regulations that govern it in order to ensure nothing inappropriate reaches their children. That isn’t exactly the case on digital destinations such as YouTube, though Nickelodeon has tapped that market for talent to build around in the past. At the same time, demand for children’s streaming original programming during COVID rose by 58%, signifying a growing appetite. Nickelodeon can provide the best of both worlds: legacy titles with name recognition, strong footprint at launch with dual cast strategies across both mediums, and a trusted brand for new-to-screen streaming originals.
Children’s titles are helped by the fact that kids rewatch them endlessly (I can still quote The Sandlot perfectly all these years later). This gives Nickelodeon’s top titles consistently sustained demand over long periods similar to TV’s most popular sitcoms and procedurals. Unlike a Stranger Things or Mandalorian, which see massive in-season spikes and then large decay rates in extended off-seasons, kids programming such as SpongeBob and PAW Patrol maintain demand at levels comparable to long-running shows such as NCIS and Young Sheldon.
Pretty much every platform could use an infusion of big name kids titles such as SpongeBob SquarePants, PAW Patrol, Avatar: The Last Airbender and Avatar: The Legend of Korra (including upcoming new entries in this franchise), The Jojo & Bowbow Show Show and more. When demand share outstrips supply share, it generally suggests a genre warrants further investment. That’s the case for kids content available on Disney+, Paramount+, Amazon Prime Video, Netflix, Hulu and Max.
Netflix, given its publicly stated desires to compete in kids animation and family programming, would be an interesting landing spot. But if the new owners want to hold on to Nickelodeon, reorienting around a streaming strategy focused on kids programming, news and sports would offer differentiated value to consumers. It would also have the added benefit of keeping the new-look Paramount+ out of direct competition with Netflix (which would likely still offer generous licensing fees for Taylor Sheridan programming and Star Trek series).
Kids Content as Multimedia Franchises
Pokemon ($147 billion), Hello Kitty ($89 billion), Winnie the Pooh ($76 billion), Mickey Mouse & Friends ($74 billion) and Star Wars ($70 billion) are the highest-grossing media franchises ever, according to Visual Capitalist. This takes into account merchandise, videos games, trading cards, box office, home video, manga and comics, and more. Family friendly franchises dominate the list completely.
Why? Because of that annoyingly lovable passionate obsession we talked about before. Kids fall hard for their favorite titles and want to engage with the property in a multitude of ways. Franchises that can craft compelling transmedia narratives that seamlessly flow into one another, like Pokemon and Star Wars have done, can generate consistent top-of-mind demand that drives consumer spend. Avatar has done well in this regard with popular novels, comics and the recent success of the live-action Netflix series.
Successfully adapting a TV series or movie into a video game is challenging but not impossible, as evidenced by the high-selling and well received Batman: Arkham franchise as well as Star Wars: Knights of the Old Republic, Star Wars: Battlefront and more. Hasbro has long dabbled with translating its toy IP into video games and Transformers, another on-screen Paramount property, generates enough demand to warrant an adaptation. The same goes for SpongeBob SquarePants, which continues to be popular on both the big and small screens.
More than 3.2 billion people play video games across the world and 1.17 billion play online, according to the Academy of Animated Art. It’s a market worth tapping into and one that is tailor made for many of Nickelodeon’s popular properties. Give us more Fairly OddParents mobile games, expand the mythology of Danny Phantom, let’s get the Teenage Mutant Ninja Turtles running atop New York City rooftops on the Apple Vision Pro.
Expanding kids content into new mediums enables studios to meet young consumers where they are in a multitude of ways. It develops brand affinity that carries over for years, leading to multi-generational fanbases that sustain over decades. Winnie the Pooh (98 years old), Hello Kitty (49 years), Star Wars (47 years), Pokemon (28 years) are all old by IP standards yet still endure. Paramount’s kids brand can be an entry point for young audiences across a variety of offerings and then an incubator to maintain engagement with a digital ecosystem as they age.
Nickelodeon can and does provide a valuable inflow of notable legacy titles and safe testing ground for new family-friendly IP, while also lending itself to multimedia revenue generation. It taps into the ever-present YouTube audience to create a conversion funnel of engagement for young viewers and is a trusted brand by parents. It sells a lot of SpongeBob merch that you will eventually trip over while making coffee in the morning after your kid forgot to put their toys away. It can either do all this for a new company entirely or continue within the Paramount ecosystem. Either way, the industry isn’t paying enough attention to what it brings to the table.
