A new report from research company Screen Digest has revealed that broadcaster spending on children's programming has remained pretty much unchanged over the last five years - falling from E1.10 billion in 2002 to E1.03 billion in 2006.

The Business of Children's Television reported that from 1985 to 2006 the number of children's channels increased significantly, with 14 full time channels in the US, 17 in France and the UK and nine in Germany.

The UK, Germany and North America have seen a decline in spending on kids programming, compared to Belgium, Italy and Spain. The report says that broadcasters now rarely provide more than a minority of production budgets, leaving producers to raise the remainder from co-production and presales, or splash out themselves.

Unsurprisingly, the market is dominated by Disney, Nickelodeon and Cartoon Network, which accounted for two thirds of the $9 billion in revenues reported by the top 25 companies in the sector in 2006.

Screen Digest also found that despite the decline in TV budgets, firms like Chorion, Rainbow, DIC Entertainment, BKN International and Alphanim were doing well. The report also said that companies which are less reliant on broadcaster commissions and acquisitions have fared considerably better than those which operate on a more conventional independent production model.

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Tim Westcott, author of the report, said: "In many ways, children's producers are at the sharp end of changes in the market as their traditional customers seek to cut the cost of their schedules. Despite an explosion in the number of thematic channels and the rapid spread of new media platforms, the majority of producers are small enterprises which are exposed to the decline in funding by generalist broadcasters."