Nickelodeon Ratings Slide: Analyst Cuts Quarterly Ad Revenue Forecast for Viacom in Half
Credit Suisse says non-Nielsen declines are less pronounced and blames lower viewership in the kids 2-11 demo and a share shift to the Disney Channel rather than a Netflix content deal as drivers of the declines.
NEW YORK - Credit Suisse analyst Spencer Wang on Friday lowered his advertising revenue growth forecast for Viacom's current quarter from 6 percent to 3 percent, citing the much-discussed ratings weakness at kids channel Nickelodeon.
He also cut his earnings per share projection for what is the entertainment company's fiscal first quarter by 4 cents to $1.02.
Nickelodeon's ratings are down less when looking at ratings data from alternative sources as compared to figures from media measurement firm Nielsen, but the channel is still trending lower, he wrote in a report entitled
"It's 10 PM, Do You Know Where Your Children Are?"
Some have wondered whether increased availability of online content may have hurt Nickelodeon. "We do not believe Nick content availability of Netflix is the culprit," Wang said though. "Using third-party data, the majority of new avails on Netflix debuted in February, which does not coincide with the ratings decline that became pronounced in the fall. Rather, it appears that declines in overall viewership in the people 2-11 demo and ratings share shift to Disney Channel are the main reasons."
Viacom CEO Philippe Dauman has said that the sudden fall decline in Nickelodeon ratings may be due to problems with Nielsen's data.
"Our review of alternative set-top box data finds that Nick ratings are still down year-over-year, the trend is similar (e.g. deterioration over the course of the quarter), but the magnitude of the decline is mid to high single digits" rather than a mid-teens drop in Nielsen's ratings, Wang wrote.
At the end of the day, "Nielsen ratings remain the currency for TV advertising," the Credit Suisse analyst highlighted in his report, echoing latest comments from Dauman earlier this week. "With the ratings weakness, our bottoms up analysis finds that Nick has limited scatter inventory in the fiscal first quarter given make goods."
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