Why Cartoon Network went from 100 million homes to off the air

Back in 2011, the Cartoon Network was in 100 million homes. People clamored to work there and outranked even Kids Network and Nickelodeon. But fast forward to 2024, it would be only watched by 74,000 people a day and the entire thing would go off the air. And look, I know what you're thinking. It's the internet, Netflix, and YouTube that killed Cartoon Network. But it turns out the death of the network started way before that and for entirely different reasons. This video is the rise and fall of Cartoon Network. By the way, I turn each and every one of these videos into a one-page cheat sheet you could download to learn more about the story. Girdley.com/youtube and get one for free for this one. Thank you to Zapier for partnering with us on this video. More on them later. Cartoon Network actually got started by somebody who didn't know hardly anything about animation. She was actually a cable executive. Betty Cohen was a UCLA grad. She started at HBO back in the 1980s and then joined Turner Broadcasting to learn the cable business in 1987. In 1991, famous cable executive and owner Ted Turner spent $320 million to buy Hanna-Barbera. And while everybody else thought it was just more cartoons to fill into time slots on channels that Ted owned, well, Mrs. Cohen saw something different. October 1st, 1992, she led the launch of a thing called the Cartoon Network. At 8 PM at night, believe it or not, when most kids were already asleep. And the funny thing was most cable operators refused to carry it. They thought that an all-cartoon network would be just a gimmick. Betty saw something other people didn't, and she had an insight, which was that those cartoons they bought from somebody else, those weren't the finish line, they were the starting line. In other words, the network needed originals in order to have IP that they could protect. And in 1992, they launched a show called What a Cartoon, and it was a crazy idea. They would give independent animators a budget and 7 minutes of time and then told them to go ham. It was the precursor to a lot of things we see today, like America's Got Talent and stuff like that, except it was for animators. And here's the deal: they would let these animators try out their ideas, and the winners that the kids loved would get full-time shows on the network. If you build technology products today, you know about this idea. You build fast and you fail fast. You get stuff in front of customers and you see what they really think. That's the best way to truly know how people are going to behave. You don't ask them, you see what they're going to do. And Betty's move here was genius. Basically, her R&D budget, in which she would try different things, was getting funded by advertisers who were paying to advertise on the show. That particular show would produce 48 spots that were all shorts. 16 of those would go on to get full series on the channel. 33% success rate. It was unheard of. Within 4 years, the Cartoon Network had a roster of shows that no network would have greenlit in a million years. No executive would have predicted they have worked. But here we ended up with things like the Powerpuff Girls, Dexter's Laboratory, and many more. Here's the thing that Betty understood that many people don't, which is that done right, cartoons are just art that kids happen to love. Heck, just go back and look at Snow White and some of the old stuff. It was more art than anything else. But at this time, Saturday morning cartoons had become the thing. And well, people saw those as just ways to sell more sugary cereals and plastic toys. And Betty saw something entirely different. The types of contracts she created to work with these creators behind these shows were entirely unique. She gave them almost total creative freedom. They were basically partners with Cartoon Network in bringing their vision to life. 1997, she'd created an entire new genre of cartoons, basically adult versions of cartoons. And in 2001, For late night, they did a version of cartoons called Adult Swim, which, as you can imagine, had a bit more mature themes to it. The time she would exit, Cartoon Network would be reaching 80 million homes and be ahead of famous kids-oriented network Nickelodeon. But look, sometimes in this channel we talk about how the departure of a key leader who gets fired changes everything. In this case, Betty kind of did get fired, or she got— had so much success, they promoted her out of the job., and that would change the entire trajectory of Cartoon Network. Sometimes the hardest thing when you own a successful organization is not doing something to grow it even faster than it's growing. It's not screwing up what is really working. And one famous, especially on this channel, AOL Time Warner. Well, basically they merged in what was the largest merger in history, and that caused the entire media side of the business to reorganize. And Betty, she got promoted to an even bigger job. In the boardroom, this idea looks pretty straightforward. You know, Betty's doing such a good job. Cartoon Network is humming. Hand it over to somebody else and give her an even bigger task to go solve. What nobody at the time realized, including me, who's walking in this puddle, is that, is that what Betty had actually done and the magic of it was that she was willing to say no to toy companies and that she was willing to put the network's interest behind those of the creators. Make them so happy that they produce some of their life's best work inside of Cartoon Network. On a positive note, I have forged the river, and we will continue on in our adventure in the drainage ditch. Oh, at least I laugh at my jokes. And this often happens when you're managing a genius like Betty. Sometimes they're so good at their job, you don't realize how hard what they're doing actually is to pull off. Replacement was a guy named Jim Samples, and for 6 years he was given the freedom to toe the line and continue what she was doing. And some of the like Cartoon Network's greatest hits came around during this time. Foster's Home for Imaginary Friends, Ben 10. The pipeline kept producing. Then in January 2007, right before the Great Recession started, disaster fell upon Cartoon Network. Today's video is sponsored by Zapier, and I want to talk to you about their product because I'm actually a real-life customer. And almost every single one of my companies, we use their products every day. For example, in one of the companies, we have a system where people apply to our website online and then we have it automatically send that candidate a text confirming their information before any human gets involved. 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The show Aqua Teen Hunger Force was getting promoted, and one of the things they did was go and put LED systems basically in a guerrilla marketing ploy around Boston. There was a problem. People looked at them and they were scared that they were bombs. The city panicked. It cost $2 million in fake emergency response, and Jim Samples had to resign. In a scenario in which a previous leader gets canceled, the new leader comes in into an even harder situation than what they were in before. Which is the new guy came in understanding that the previous guy had been canceled and suddenly, well, he understood that taking risk wasn't going to be that appreciated. And here's one thing that happens when you bring in a new leader. The new leader always has new plans. Same thing, by the way, when you switch lawyers, your new lawyer will always hate the work that your old lawyer did. I guarantee that that is what will happen when you switch lawyers. And remember how the work of Betty and so on had been about saying no to toy companies? Well, it turns out the new leader of Cartoon Network at this moment was Stuart Snyder. Guess where he came from? Well, he had been president of Hasbro, and they make toys. Coming from Hasbro, Mr. Snyder saw content like cartoons as a way to sell more plastic toys. He took over the entire division, including Cartoon Network, in 2007, and his view to grow things was that they needed to diversify. He saw Nickelodeon and Disney both winning with kids' live-action. There was a problem with something like Disney's live-action stuff. It had taken decades to create all the stars, the brands, the institutional knowledge from doing things wrong over decades and then fixing them. But Cartoon Network had none of those things. But here was Snyder coming in knowing nothing about how all that worked, looking at it from the outside and thinking it would be pretty easy. And look, I've been there before in business. You look and see the grass is greener— by the way, it's super green in San Antonio right now, it's been raining like crazy—, and you think, man, well, that can't be that hard. And you get into that other business, you realize, holy crap, this is much more difficult than I thought. But in 2009, that's when they launched Cartoon Network Real, and the idea was to do a bunch of reality type TV shows. Well, just like Disney and Nickelodeon had been doing things like Destroy Build Destroy, Brain Rush. They all came out around this time. You can imagine what would happen next. There was an entire network named Cartoon Network, and the joke around the internet and the water cooler was Cartoon Network doesn't show cartoons anymore. Yeah, it's kind of like MTV not showing music anymore. That's exactly what was happening. But here was something they didn't think about in the boardroom when they greenlit all this stuff was what was happening with all these star creators that were creating these magical shows inside of Cartoon Network. Guy who created Dexter's Laboratory and Samurai Jack walked right out the door and signed with nearby Sony. In 2012, he would make Hotel Transylvania That would make Sony Pictures $1.5 billion. That's what they had given up by trying to chase a dream of real-world TV type stuff. Craig McCracken— I hope it's McCracken, because that's the way I remember it. If your name's not McCracken, I'm really sorry. He left for Disney in 2012 as well. He'd done things like Powder Puff Girls. He's a star. But Craig's brother Phil, he stayed. Lauren Faust left as well. She created a version of My Little Pony that would go on to do $1 billion in sales for another network. Part of the reason we because Stuart Snyder was canceling shows that he considered too optimized for little girls to watch. And here she was, Lauren, leaving to a place that, well, was happy to have little girls as viewers. Here was Stuart Snyder unraveling everything that Betty Cohen had created. 3 of the key creators who created the whole network basically on their backs were gone within 3 years. If you're looking at examples in the NBA or the NFL, they talk about what it's like to lose the locker room. Well, that's exactly what had just happened at Cartoon Network. Meanwhile, if you're in the boardroom and you're looking at KPIs, the key performance indicators, things look pretty good. In fact, in 2011, toy sales or licensing from toy sales was up 20% for the network. He found more validation that Ben 10, a show they had created during his tenure that was explicitly designed to sell toys, was killing it and doing really well. They misread the situation. Ben 10 had worked because they had understood how to tell great stories, which then turned into toy sales. But Snyder and his team read it as make show, sell toys. And that's not what happens in reality. By the way, if you'd like to know how to win on YouTube, I will tell you exactly right now. You have to know how to tell stories. Even in a drainage ditch, people freaking watch them, but you got to know how to tell stories. And I see so many people trying to make it on YouTube refusing to tell stories because that's how we're wired to create or consume stuff. And, uh, they just don't do it, and they get like 3 views on everything. Anyway, they do what they do. Snyder would go on to basically evaluate every show pitch from here on out as to whether it would help them sell more toys. Things like Symbionic, the Green Lantern show. Basically, they were all just considered, are you going to help us sell more toys? And if the answer was no, they didn't run it. In this show, we talk a lot about the problem of the principal-agent problem, which is sometimes you have somebody representing you as your agent who doesn't necessarily have your best interests at heart. And that's because they instead have incentives to do things that might not be good for you. And here Schneider was being measured in the boardroom based on how much revenue he generated in the short term. Not whether he was setting Cartoon Network up for a failure in the future. And look, to be fair to Snyder, a number of the shows that are beloved by fans launched during this time and succeeded despite him. Adventure Time and a number of those, they all came from this era. Interestingly enough, Adventure Time had been passed on twice by Nickelodeon. It was exactly the type of show that Betty Cohen would have shepherded through the whole process. But the only reason it actually got put on Cartoon Network was because the people who were left over from the Betty era They basically protected the show and shepherded it through, shielding it from Mr. Schneider's, uh, well, changes. In the end, Schneider decided that he wanted to grow Cartoon Network and fix its problem of being too narrow by getting it into a bunch of other stuff. And Betty Cohen had seen that the idea of a network was that you start with great stories, building things around what kids want to watch, whether they're boys or girls. But Schneider looked at the problem differently. He saw that boys tended to be the ones that you bought toys for, and little girls, they weren't the same kind of consumers. And kids are not stupid. In the end, they understand if you're just trying to sell them stuff or you're trying to speak to them like the human beings they are. And Betty Cohen's era respected that, and the Snyder one did not. Once you lose customer trust, it is entirely difficult to get it back. And that was the point into 2014 where Cartoon Network found itself. In March 2014, Stuart Snyder quietly left the network and he was replaced by Christina Miller. The channel still operates today, and unfortunately it ran into the same buzzsaw that ESPN and a number of other culturally defining networks got exposed to. And that buzzsaw was the internet, YouTube, and streaming, all of which were coming headfirst to kill the idea of the cable subscription that Cartoon Network and many other things like ESPN had relied upon to become big. Betty Cohen would do okay in life, but she'd never get a shot to run another network of her own. Cartoon Network the greatest streaming network in the history of kids' TV would become a cultural footnote. And today it's basically irrelevant. And those creators who had made it all happen by being respected by Betty and her team, they're still out making shows and they made them for other networks, just not Cartoon Network. And in 2024, when Cartoon Network went off the air for the last time, it was clear that that was the dying moment. But the reality was it had been killed over a decade earlier. All right, that's it for Cartoon Network. If you enjoyed the video, let me know in the comments below. It encourages me to make more. And if you have thoughts or arguments, or if I got something wrong, also let me know in the comments because that also makes me feel bad. All right, catch you next time.