Cartoon Network

Description | Analysis | Online Presence | Digitization and Implications

Cartoon NetworkCartoon_Network_Logo
General HQ
1015 Techwood Drive NW
Atlanta, GA 30318

The Cartoon Network is a cable television network of the Turner Broadcasting System, a Time Warner Inc. subsidiary. Time Warner Inc. is a global media and entertainment company focused on the areas of television networks, film and entertainment, and – until recently – publishing. The Turner Broadcasting System owns and operates a wide variety of cable television networks, such as TNT, CNN, and TBS, and broadcasts content under these and other brands in over 200 countries. Cartoon Network was founded in 1992 to produce and air animated content and is the primary network operating under the Turner Broadcasting System that targets children and young adults with animated entertainment. Its current and popular programs include Adventure Time, Ben 10, Regular Show, and Level Up. In 2001, Cartoon Network launched Adult Swim, an animated adult programming segment targeting ages 18-34. Though Adult Swim was not considered a separate network, it targeted older audiences who the network estimated would continue watching Cartoon Network after 11 pm if it contained more adult humor and mature content. In 2005, Turner officially launched Adult Swim as a separate network rather than simply a late-night segment of Cartoon Network so it could then be recognized by Nielsen as its own channel. Aside from the programming Cartoon Network provides children and adults on the 24-hour cable television network, it also distributes online content. In March 2014, Turner Cartoon Network released a brand new collection of original online content. New online content is designed for its core audience of children which adds to their television content as well as existing content and includes shorts, interstitials, short-form and traditional series, and free gaming. The new digital content streams on the network’s website and is accessible by smart phones, tablets, and on demand services.

Cartoon Network’s parent company, Time Warner Inc., is one of the largest media conglomerates in the industry, competing with the likes of The Walt Disney Company, Comcast Corporation (NBCUniversal), and Viacom Inc. Cartoon Network’s own major competitors are Viacom’s Comedy Central and Nickelodeon, and The Walt Disney Company’s Disney Channel. Cartoon Network has benefitted specifically from Turner’s relationship to Time Warner through the Warner Bros. Animation and Williams Street production studios, both owned by Time Warner. The network is able to continue to produce new content through these as well as accessing and programming older animated content from Hanna-Barbera through the Time Warner library, for example.

Cartoon Network earns most of its revenue through subscriber fees, advertising, sponsorships, and licensed merchandise for characters from its most popular shows.[1] In October of 2013, during a carriage battle with Turner Broadcasting System, the cable provider Cable ONE declared it was deactivating the signals for Cartoon Network, TBS, and TNT because it could not meet Turner’s demand for an increase of 50% for certain channels. Turner reported it was simply trying to secure what they believe to be fair compensation for their content. Though Cable ONE thought it had carriage rights to certain networks such as Cartoon Network through a deal with the National Cable Television Cooperative, the companies reached a deal in late October and the networks were restored to Cable ONE subscribers.

Turner Broadcasting System employs 6,700 people in the Atlanta area – the 20th largest metropolitan region employer – out of which Cartoon Network employs roughly 500. However, Turner is currently in the midst of restructuring, which has so far resulted in buy-out offers to staff and may later include layoffs. The company is expected to reduce total employment (that is, not just in Atlanta) by 500 to 600 staff. Not just a large employer in the Atlanta area, Cartoon Network and Turner are also philanthropically involved in the community. The company has participated in fundraising and community outreach events both nationally and in Atlanta through events like the Rescuing Recess[2] campaign and the GENERATE design challenge.

Cartoon Network has succeeded in its children’s programming niche since 1992 in large part thanks to the support of its parent, Turner Broadcasting System. Turner has issued support by investing in online infrastructure and content for its networks and negotiating corporate-level distribution agreements across networks with cable providers and now also Netflix. Offering viewers more online access points to its content is now a strategic goal of parent company Time Warner – but doing so may cut into Cartoon Network’s ability to monetize its typically younger viewers through advertising. While the addition of a lengthy list of its shows to Netflix over the last year will bring in content revenue, this access may also come to mean uncertainty for ratings, linear viewership, and thus advertising revenue growth. Digitization and increasing ways for viewers to access content may keep viewers attached to Cartoon Network content in Turner’s advertising space, but laws like the Children’s Online Privacy Protection Act (COPPA), updated in 2013, prevent Turner from tracking its younger viewers – a major component of monetizing online viewership through advertisements. Though Turner launched an online ad network in 2013 to monetize its web presence, Cartoon Network was excluded from the offering because its visitors tend to be younger. However, when discussing Cartoon Network’s online presence and effects on revenues and digitization across several platforms, it is arguable that though each area could easily cannibalize profits, the others might compensate and facilitate net growth.

Online Presence Offers International Opportunities and Risks at Home
Cartoon Network licensed transmission rights to Netflix in order to expand its online access points, it did so at the risk of lowering television ratings. Cartoon Network agreed to add a handful of successful old and new shows including Johnny Bravo, Adventure Time, and shows from Adult Swim like The Venture Bros. and Robot Chicken at the start of 2013. But by Fall 2013, it was reported that the network’s ratings were 10 percent lower in households with Netflix accounts after Turner made the deal. Adult Swim started to suffer the same impact when its viewership went down by 18%. Though Cartoon Network offers an On Demand option for cable subscribers to access current shows, there is still the threat that more consumers will cancel their cable subscriptions in favor of paying a cheaper monthly rate for a streaming service such as Netflix. However, Cartoon Network reported that this decline in ratings was mostly because of the loss of certain hit programs such as Ninjago rather than its viewers turning to Netflix. Furthermore, Netflix only holds older shows no longer shown on Cartoon Network or past seasons of current shows which, to the benefit of the network, might not be appealing to a younger generation. The cable subscription is still appealing to those (especially families with children) who want to keep up with the new episodes of current shows and partake in the network’s primetime block which has proved to be very successful with the run of shows like Adventure Time.

Digitization, Ease of Access and Implications for Culture
Ease of access through a variety of platforms can enhance the viewership of those who are already regular watchers of the network as well as spread the word to others who might not be watching or might not be aware of newly successful programming. “Card Wars,” a game for Cartoon Network’s Adventure Time, was in March 2014 the third most popular paid app for iPads and iPhones. The 2012 creation of the Cartoon Network 2.0 app sparked a great amount of recognition and reviews when it announced it would allow kids to watch clips or stream live programming while playing a game at the same time. The app added to the already existing live-streaming aspect of Cartoon Network content by allowing users to split the screen and play a game while content streams concurrently or rotate the screen to choose one or the other. Innovations such as this, made available on several different platforms such as the iPhone, iPod Touch, and iPad make Cartoon Network stand out as a company as well as a brand by setting itself apart with new and exciting ways for users to participate rather than just passively view. Animators and game creators at Cartoon Network are using their expertise to develop the top apps in the industry among competitors using content from the most popularly ranked programs. Because Cartoon Network recognizes that its target age is a younger audience they partner with digital companies to leverage creativity beyond just the content on linear television programming.

Cartoon Network continues to think of ways to take advantage of the mobile platform. The company announced March 7, 2014 that an updated app that will deliver 15 second clips of animated content, games, trivia, or polls will emerge later this year. Cartoon Network’s goal with the new app is to fully embrace the functionality of mobile devices in that people often use them for short videos they can look through quickly rather than full episodes which are mainly reserved for the iPad. The app is expected to be free as well as interactive which builds on the success of Cartoon Network 2.0 in that it allows kids to feel like they are in control of the app by choosing what to watch or play and when.

[1] Time Warner. 2012 Annual Report.
[2] Foster, Vanessa. 2008. “Cartoon network tackles a children’s issue by making activism and volunteering fun.” Global Business & Organizational Excellence 27, no. 2: 7-15.

Company Profile Contributor: Claire Maxwell, Georgia State University, 2014.

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