Nick stumbles into adolescence

Early last year, Paramount and Nickelodeon executives decided to hold a research screening on the Paramount lot for “Hey Arnold! The Movie.” The film was originally intended as a cable TV movie based on the Nickelodeon cartoon series, and the animation was as primitive as you would expect for a $4-million title aimed at the small screen.

But “Hey Arnold!” tested surprisingly well, and the executives congratulated one another as they left the theater. Even though Paramount, which distributes Nickelodeon movies, initially had rejected the idea of turning the “Hey Arnold!” script into a feature film, the studio immediately decided to release the movie theatrically, scheduling it days after “Lilo & Stitch” and “Scooby-Doo” debuted.

“Hey Arnold!” was greeted by such poor reviews and withering ticket sales that Nickelodeon executives now believe that the movie didn’t just fail but actually tarnished one of the company’s best selling points: its trustworthy brand name.

That misstep is indicative of some of the troubles the once white-hot Nickelodeon Movies division has recently suffered. While December’s “The Wild Thornberrys” attracted strong notices, it grossed less than $40 million, and this month’s “Rugrats Go Wild” is generating similarly unexceptional business, finishing in eighth place in its third weekend with receipts of $30.8 million to date.

These bland returns follow a string of smashes from 1998 to 2001 that included the first “Rugrats” film (domestic gross: $100.5 million) and “Jimmy Neutron: Boy Genius” ($80.9 million).

The three recent underachievers are not Nickelodeon’s sole worry. The film division, which just two years ago seemed ideally positioned to exploit the boom in family films, also must address the rapidly shifting family marketplace. Although Nickelodeon’s television channel prospers with kids ages 2 to 11, that young audience no longer can single-handedly drive a successful feature.

The most lucrative “family” films, in fact, are no longer limited to G-rated fare such as “Finding Nemo” but now include the more adult-oriented titles “Spider-Man,” “The Lord of the Rings” and “Bruce Almighty.” For the first time, Walt Disney Pictures is releasing a PG-13 film, July 9’s “Pirates of the Caribbean.”

At the same time, the audience for some of Nickelodeon’s movies is moving in the opposite direction, growing younger, particularly with its “Rugrats” sequels (animated sequels generally have younger audiences than the first film). The challenge for Nickelodeon, then, is not unlike what its millions of child viewers must inevitably do: grow up and try not to be an awkward adolescent.

“We want to become broader and bigger,” says Albie Hecht, president of Nickelodeon Movies. “But everything is evolutionary. You can’t jump in all at once.”

How the slip began

Once the focus of a handful of studios, family film scripts are now filling every executive’s in-basket. As more and more players entered the family market, Nickelodeon’s competitive advantage -- and box-office returns -- started to slip.

A Nickelodeon attempt to make a film for young teens -- 2002’s “Clockstoppers” -- was not a hit (it was hurt by the unexpected blockbuster “Ice Age”), and “The Wild Thornberrys,” which Paramount released in the midst of the jam-packed Christmas season, did not deliver returns consistent with its ranking as Nickelodeon’s highest-rated prime-time series.

“We were very proud of that film, but I don’t know if we succeeded in separating it from the TV show,” Julia Pistor, the senior vice president of Nickelodeon Movies, says of “Thornberrys.” “We were not able [to convince people] it was a film experience.”

The larger concern is that some Nickelodeon movies are no longer family films but parental “hand-holder” films, in the words of Rob Friedman, Paramount’s vice chairman, meaning they are movies that moms or dads attend out of obligation, not desire. Paramount and Nickelodeon insist that because their family films cost a fraction of the budget of audience favorites like “Shrek,” it’s unfair to compare the ticket sales head-to-head. Yet that defense actually reveals a flaw in Nickelodeon’s strategy: As studios spend small fortunes making impressive, computer-animated visual spectacles, Nickelodeon’s cheap movies in comparison just look cheaper. In fact, they look a lot like the channel’s TV shows, blown up to 35-millimeter.

Although Nickelodeon can help build a movie audience through an established cable channel series or new special programs, other studios enjoy better synergy than Paramount and Nickelodeon (both are owned by Viacom). Disney’s cable channel, for instance, does not accept advertising. So when Disney uses the channel to launch a film like “The Lizzie McGuire Movie,” there are no other movie advertisements cluttering the message.

Nickelodeon not only accepts commercials but also runs tons of movie spots from studios other than Paramount. On a recent morning, the second commercial following a spot for “Rugrats Go Wild” was an ad for Disney’s “Finding Nemo.”

A lot of fussing

Publicly, Paramount and Nickelodeon say they enjoy their relationship. Privately, they are fighting like toddlers, blaming each other for the recent films’ performance. The two can’t even agree on finances. Paramount says it made money with “Hey Arnold!” Nickelodeon says it was a money-loser.

In any case, turning a corner will take time -- and money. Nickelodeon is not scheduled to release another film for a year and a half, and one of its next movies, “Lemony Snicket’s A Series of Unfortunate Events” with Jim Carrey, may not even carry the company logo.

In the intervening 18 months, Nickelodeon Movies will continue shifting its programming philosophy, attempting to produce more financially (and theoretically more artistically) ambitious works. Hecht says the mix will be divided among live-action comedies with recognizable actors in the vein of its hit “Snow Day,” animated works that include a movie version of “SpongeBob SquarePants,” and bigger-budget event films such as “Lemony Snicket.”

Outside of the film adapted from the wildly popular “SpongeBob” series due late next year, the development slate of about 40 projects focuses less on existing Nickelodeon shows and more on bestselling books like “Where’s Waldo?” and “The Spiderwick Chronicles” and TV chestnuts such as “Mighty Mouse,” set to be directed by John Woo, and “Father Knows Best,” with Tim Allen.

“Kids want to see movies that everybody else is going to see. They want to be part of the pop culture,” Pistor says. “We need to look for material that will appeal to that audience.”

The shift, which Nickelodeon says comes not in response to its recent dry spell but as part of a wider initiative to extend Nickelodeon’s reach, is meant to address the rapid adjustment of what defines a family film.

“I don’t think the marketplace is the same,” Hecht says. “The audience has moved. I think we can do a PG-13 movie now. Our brand is big enough.”

All the same, the brand still carries enough juvenile connotations that Nickelodeon’s logo likely will not appear on next fall’s “Lemony Snicket,” even though Nickelodeon first bought the rights to the dark children’s books. The movie is a co-production of Nickelodeon, Paramount and DreamWorks.

Nickelodeon also is still figuring out how to use its massive cable channel to best help the movie unit.

Strategy decisions

To goose interest in the first “Rugrats” movie five years ago, Nickelodeon briefly pulled the show from the schedule. It may have helped the film, but “people were really upset,” Pistor says. “And if it’s not good for kids, it’s not good for us.”

The channel didn’t do the same thing for the two subsequent “Rugrats” films, which Paramount thinks hurt the movies at the box office. Nickelodeon has yet to decide whether it will pull “SpongeBob” from its TV schedule before that movie comes out.

To take better advantage of the cable channel, Paramount and Nickelodeon are developing a movie that may first get a test-drive on TV. Nickelodeon now has a film script for “Angus, Thongs and Full-Frontal Snogging,” adapted by the book by Louise Rennison about a 14-year-old British girl.

But before any money is committed to make the movie, the concept will be tried as a TV series. If it works, the movie will be made. If not, millions will be saved.

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Faltering after an impressive start

Nickelodeon’s movie division had a string of hits from 1998 to 2001. But its last four films have all delivered uninspiring returns:

“Harriet the Spy” (1996)...$26.5 million

“Good Burger” (1997)...$23.7 million

“The Rugrats Movie” (1998)...$100.5 million

“Snow Day” (1999)...$60 million

“Rugrats in Paris: The Movie” (2000)...$76.5 million

“Jimmy Neutron: Boy Genius” (2001)...$80.9 million

“Clockstoppers” (2002)...$37 million

“Hey Arnold! The Movie” (2002)...$13.7 million

“The Wild Thornberrys” (2002)...$39.9 million

“Rugrats Go Wild” (2003)...$30.8 million