By Claire Atkinson

Advertising Age

After four years of growth-and a torrid 2004-the kids TV upfront market is hitting a wall.

Toy retailer consolidation, Federal Communications Commission regulations on advertising to minors and marketers’ anxiety over the obesity issue are all conspiring to stunt growth in the kids TV market, expected to languish between $800 million and $850 million this year.

Last year’s kids upfront saw price increases of 15 percent to 20 percent. But as Cartoon Network and Kids’ WB kick off upfront presentations this week, the outlook is flat. “Toys is in the toilet. Food is on the ropes. I don’t see any consistent growth category,” said Shelly Hirsch, CEO of Summit Media Group. He noted that last year’s buoyant market was the first big rise in four years and that buyers wouldn’t stomach such hikes again.

Mr. Hirsch, whose clients include California-based toy firm Jakks Pacific, said, “The whole upfront idea is something of the past.” He contends that five toy retailers essentially control the kids TV market, naming Wal-Mart, Target, Kmart, Toys `R’ Us and KB Toys. “By the end of this year there might be three.”

The weak toy category is just one of the unknowns threatening this year’s kids market. New FCC rules include, for the first time, networks’ own promos as part of their commercial load. The Children’s Television Act requires that kids programming include no more than 12 minutes per hour on weekdays and 10.5 minutes on the weekend during shows aimed at kids under 13.

While the market won’t shake out until April, some marketers have struck early deals with Nickelodeon in a move to snap up what’s likely to be limited inventory. “We have some business we’ve already done in key categories, upfront money we’ve already written from significant players in major categories, including autos, toys and food,” said Sue Danaher, executive VP and general manager of sales at Viacom-owned Nickelodeon, which also sells CBS’s morning block. Nickelodeon, not surprisingly, is bullish on upfront prospects, predicting a 10 percent rise to around $935 million.

At least one buyer thinks the market could shrink, citing the lack of a breakout toy during the 2004 holidays. Nickelodeon reports growth in retail, fashion, beauty and wireless telecom.