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posted: 12/2/2012 5:00 AM

"Doc McStuffins' tops 'Dora' among preschoolers

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Bloomberg News

LOS ANGELES -- Walt Disney's "Doc McStuffins" has emerged as the top-rated cable TV show for preschoolers, taking viewers from Viacom's children's networks and its long-running hit "Dora the Explorer."

"Doc McStuffins," introduced in March, is averaging 774,000 viewers ages 2 to 5 at 10 a.m. weekdays on the Disney Channel, according to Nielsen data. The program drew 1.7 million viewers of all ages, including those who recorded and watched the show within a week. "Dora" averaged 667,000 on Viacom's Nickelodeon in that age group and 1.4 million in total, the data show.

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Disney, the world's largest entertainment company, introduced "Doc McStuffins" this year along with Disney Junior, a new cable network aimed at 2- to 7-year-olds. The company is taking on Viacom's flagship Nickelodeon kids' channel and its Nick Jr., which is aimed at preschoolers. Viacom, based in New York, has long been the leader in that demographic with shows such as "Dora" and "Blues Clues."

"Disney has executed well and is gaining share overall against Viacom in the preschool and up to 10-year-old kids market," said Martin Pyykkonen, an analyst at Wedge Partners in Greenwood Village, Colo., who follows both companies.

Disney's gains translated into toy sales at the outset of the holiday shopping season. "Doc McStuffins" items were in short supply last weekend, according to Gerrick Johnson, an analyst at BMO Capital Markets in New York. Johnson said his team visited Toys "R" Us Inc., Target Corp. and other stores in New York and North Carolina.

"You won't find Doc McStuffins in any store you check," Johnson said in an email.

The cartoon character, a 6-year-old who cares for sick toys, runs on both Disney Channel and Disney Junior. Ratings for Disney Junior aren't yet available, according to the Burbank, California-based company.

Ratings for "Dora" and Nickelodeon's other shows for younger viewers are improving, said Dan Martinsen, a spokesman for Viacom's Nickelodeon networks.

The network's preschool programming has registered higher ratings than Disney this quarter, as it did in the first half, he said. The company offered fewer preschool shows over the summer when older kids were out of school, according to Martinsen.

This quarter, "Doc McStuffins" is averaging 669,000 2- to 5 year-old viewers on the Disney Channel, according to Nielsen. "Dora" averaged 659,000 in the same time period on Nickelodeon.

Children's TV is lucrative for entertainment companies because it helps sell toys and other merchandise they license, and generates cable subscriber fees.

The Disney Channel accounts for about 25 percent of the parent company's income from cable networks, its largest business, Pyykkonen said. In the fiscal year ended Sept. 29, Disney's cable networks reported operating income of $5.7 billion, a 9 percent increase from a year earlier.

Sales at Disney's consumer products division rose 6.7 percent to $3.25 billion for the fiscal year. Ancillary revenue from Viacom's cable networks fell 13 percent to $549 million over the same period.

"If it's a battle of consumer products, Disney wins," said Todd Juenger, an analyst who follows both companies at Sanford C. Bernstein & Co. in New York. "They have an almost insurmountable, supply, distribution, shelf-space advantage."

"Dora" has produced more than $11 billion in revenue at retail since her 2000 debut, Martinsen said.

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