And another post >.<
It probably wasn't Cartoon Network alone who's having this problem. It's quite likely their parent company Warner Brothers has had it for quite some time.
Case in point: The Iron Giant (released 1999).
The film was critically acclaimed and people liked it, so why was it a financial disappointment?
According to the then CEO of WB:
People always say to me, 'Why don't you make smarter family movies?' The lesson is, Every time you do, you get slaughtered."
I think Brad Bird has a more accurate diagnosis:
The movie business at large, it’s nomadic. You know, you assemble your creative team, you make the film, and then the team disbands. Well, in animation it’s so time-intensive, and it’s got a million moving parts, and you really have to build a team, and then you have to hold the team together. So they were trying to follow the Disney model of having a division. But they didn’t realize that Disney took years to build that division.
They spent a lot of money on a lot of not-very-well conceived projects, and they were kind of exiting the stage. And it was cheaper to have us finish our film than to scrap it. So we were finished — but they didn’t really have any expectations for us. So the great thing when we were making it was that, as long as we produced it efficiently, they left us alone. And the terrible thing about it is that when it came time to come out, they [laughing] kind of left us alone.
Used car salesmen, in other words.
I just thought about this while I was watching a video on The Incredibles, even though I knew about The Iron Giant being poorly handled by the distributor long before this. Me and my dumb brain.