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Nickelodeon quits Germany
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May 29, 1998: 7:12 p.m. ET
Network ceasing German operations, but program licensing deals are planned
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NEW YORK (CNNfn) - Children's programming giant Nickelodeon announced Friday it is pulling the plug on its German operations after just three years, laying off 90 employees.
The company, which launched a full-service German network in July of 1995, cited structural challenges, including "an oversupply of advertising inventory and the lack of distribution revenues," for ceasing operations as soon as this weekend.
"Over time it has become clear that the current state of the German television market does not justify the expense of a full service network, particularly in light of the many opportunities for Nickelodeon in other parts of the world," said Karen Flischel, managing director of Nickelodeon in Europe.
Nickelodeon currently enjoys an average market share of 9.5 percent in Germany.
The company said it was not completely abandoning its German programming, but would serve Nickelodeon's sizable audience through program arrangements with other media outlets.
"We believe a program licensing approach is more appropriate for us in this market," said Flischel.
The company would not comment on any pending deals it may have to sell its programming to German networks.
One analyst said Nickelodeon's profit margins in Germany were simply unacceptable.
"They were unhappy with the way the business was shaping up. It wasn't producing the returns they wanted," said Cowen & Company's entertainment analyst Harold Vogel.
Vogel added that licensing agreements are "relatively less expensive" than running a full-service network.
Nickelodeon is a unit of Viacom Inc. 
-- by staff writer Nicole Jacoby
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Nickelodeon
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