Nick has jumped the shark, but I wouldn't just blame it on one thing.
Nickeloden has a reputation on cartoons, not just "real people" shows.
Nickeloden now just produces 3 cartoons, Spongebob, OddParents, and Avatar.
Of these 3, just 1 has a plot.
Spongebob is, sadly, getting old fast. While it is tough to compare to the Simpsons, if Spongebob could get out of a slump, they could really pick things up, and even be competition.
OddParents, I expect, will stop after 2 maybe 3 years.
They have jumped the shark very recently by adding a new character to the lineup. This is never good for keeping a show good.
Nick has experimented with other cartoons in the past few years, including Jimmy Neutron, Catscratch, and Danny Phantom; and has a few cartoons where we are not sure if they are still being made or not, like Barnyard, Tak, El Tigre, and whatnot.
Spongebob and OddParents seem to be dying out, but Avatar seems to have a nice hold.
Avatar has classic animation, but it does have a plot. Plots are good for keeping people on a channel. I'm pretty sure that Avatar is the only show on Nickeloden that has a plot. On the other shows, it helps to have watch previous episodes, but you can just watch episodes out of order.
Imagine watching a random episode of LOST. And you have never seen an episode before. You just can't do it.
Avatar has been a really good show, and I love it, but it has a limited number of seasons, 4. So, in 2 years, things might be really bad for Nick.
Nick is going to have to create a TV show that can stand the test of time, won't have to create new characters, and people will watch it.
Nick also needs to have some good "real people" shows. It needs to have a show as funny as Drake & Josh, but where the main characters don't get pregnant (if you know what I mean :wink: )
If Nick doesn't do something really productive really soon, I can imagine another buy-in, like Nick GaS.