Analyst: Nickelodeon Isn't Pulling Its Weight at Viacom

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The Nickelodeon cable network is dragging Viacom down, according to a 12-page report Monday from Pivotal Research Group analyst Brian Wieser.

Wieser told clients that his team analyzed Rentrak set-top box data from 8.5 million homes, compared it to Nielsen ratings and determined that TV viewership among children is up in the past 10 months, just not at Nickelodeon.

Wieser said that attempting to place the blame for Nickelodeon’s lackluster performance of late on new technology is a nonstarter.

“Online video and Netflix equate to only 5 percent of the more than 40 billion person-hours of traditional linear television that is consumed in the course of a month in the United States. Among kids, the data is similar,” he writes.

Nielsen data, says Wieser, shows that “traditional television viewing among kids 2-11 has been on an upswing in recent years, year, “it is clear that Nickelodeon lost a substantial number of viewers over the past year.”

“Kids have not abandoned TV for new video platforms," the analyst writes. "There is no credible evidence that online video or Netflix impacts traditional TV viewing ... drops at Nickelodeon are still real."

Wieser said Nickelodeon’s domestic programming generated about $900 million in advertising revenue last year out of nearly $5 billion in total advertising for Viacom’s networks around the world, but he doesn’t expect growth until the second half of next year.

“This return to growth is highly dependent upon Nickelodeon improving its programming, including its content procurement, scheduling and marketing efforts,” the analyst wrote.

Wieser’s report includes a line graph comparing ratings for Nickelodeon, Disney Channel, Cartoon Network, Disney XD, Nick Jr., TeenNick, NickToons and The Hub going back to November, 2010.

Despite his down assessment of Nickelodeon, Wieser is bullish on Viacaom stock, with a target price of $73 and a “buy” recommendation. The shares closed a dime lower on Monday to $50.76.