Children’s cable programmers are playing a losing game of arbitrage by cutting deals with Netflix.

That’s according to an analysis of ratings for Turner Broadcasting System’s Cartoon Network by Sanford Bernstein analyst Todd Juenger — and while the network admitted Netflix did cut into TV ratings, the drop was not as steep as its worst-case scenario.

In January 2013, Turner inked a deal with Netflix that included shows on Cartoon Network and Adult Swim. Now nearly half of programs running on Cartoon are also available on the streaming service, including “Adventure Time” (pictured above), “Dexter’s Laboratory,” “Powerpuff Girls” and “Cow & Chicken.”

Since Cartoon Network content became available on Netflix on March 30, ratings in Netflix households have been 10% lower versus viewership in non-Netflix households. Adult Swim viewership is 18% lower among Netflix homes.

“If there was anybody out there who still didn’t believe that SVOD hurt kids ratings, this should put a final end to that debate,” Juenger wrote.

Overall, Cartoon’s ratings have dropped 23% from April to July on a year-to-year basis and the trend is getting worse, according to Juenger, with July ratings down 40% from the year prior.

In a statement, Cartoon Network said it had previously assumed that providing kids content to Netflix would cause a decline of 3% to 5% in viewership nationally. In fact, the Bernstein report shows that overall, the network’s ratings dropped overall by 3% because of Netflix, based on the assumption that 30% of Cartoon’s viewers subscribe to the service.

“Our own more recent analyses and the most recent Bernstein analysis confirm a national impact of about 3%” because of Cartoon shows becoming available on Netflix, the network said.

Meanwhile, according to Cartoon, any other ratings declines are not because of Netflix. The drop in ratings is largely attributable to the loss of returning hits such as “Ninjago” in the first part of 2013, the network said. Most of Cartoon’s newest series are debuting at the end of the summer going into the fourth quarter (such as “Uncle Grandpa,” which bowed Sept. 2).

Juenger has floated the hypothesis that Netflix deals are a bad bet for kid TV nets before. In an April 2012 report, he found TV ratings among Netflix subscribers grew year-over-year 2% for Viacom networks and 6% for Disney’s — compared with ratings increases of 6% for Viacom and 11% for Disney in non-Netflix households.

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For other genres, TV ratings can actually benefit from past seasons being available on SVOD. AMC Networks, for example, saw ratings of “Breaking Bad” grow 50% in season four, with viewership for the fifth and final season airing now still climbing, according to president and CEO Josh Sapan, speaking Wednesday at the Bank of America Merrill Lynch Media, Communications and Entertainment Conference. All past seasons of “Breaking Bad” are available to stream on Netflix.

For Cartoon, the tradeoff of lost TV audience versus incremental subscription VOD revenue is probably slightly positive as the network appears to be making a few million dollars net from the Netflix deal.

But that short-term gain is shortsighted because licensing deals will help Netflix and other SVOD services gain traction and potentially fuel cord-cutting, Juenger argued.

“Consumers will be encouraged to embed SVOD more deeply into their habits,” he wrote. “The consumer value of the pay-TV bundle erodes, jeopardizing the entire ecosystem.”

Viacom has the most to lose from kid auds migrating to SVOD, while Disney is largely protected given its small amount of ad revenue on kid channels and its on-demand apps, Juenger wrote.

Juenger’s analysis used data obtained from TiVo’s StopWatch measurement service to compare TV viewing in households that subscribe to Netflix and those that don’t.