The ratings of the Itchy & Scratchy Show segment of the Krusty the Clown Show fall dramatically. Krusty gives the cartoon's producer, Roger Meyers, Jr., an ultimatum: find a way to fix the sagging ratings, or else a Chinese cartoon program will replace Itchy and Scratchy. Meyers decides to commission a focus group to discover why Itchy and Scratchy has lost its popularity.
Bart and Lisa participate in the study after wandering away from Marge at the mall, watching cartoons and answering questions. However, things do not go very well, with the children in the focus group contradicting themselves when explaining what they want (they agree that Itchy and Scratchy should be both more realistic and more fantastical). Eventually, Lisa says that there was nothing wrong with Itchy and Scratchy in the first place; rather, the characters had simply lost their novelty, and with it, the impact they once had on their audience. Meyers thanks Lisa for "saving" Itchy and Scratchy, and decides that his cartoon's salvation lies in a new character. He tells Krusty and his team of writers that this new character should be a dog with "attitude", who will be called Poochie.
Bart and Lisa suggest Homer give voice acting a try when they read that there will be open auditions. Homer auditions to read for Poochie's voice, and gets the part. He and June Bellamy, his fellow voice actor, make several publicity stops to promote Poochie, where Homer confronts the show's hardcore fans. Homer invites all of his friends and relatives to the screening of the first Itchy & Scratchy & Poochie Show. However, the cartoon is full of clichés and asinine antics, and by emphasizing Poochie, contains none of the show's trademark violence. Everyone except Homer finds the episode unimpressive. Meyers is forced to admit that Poochie's debut was a dud, and he decides to retire the character before he does any further “damage”.
Homer learns that Poochie will be killed off, and resolves to keep Poochie alive. At his next recording session, rather than reading from the script, he implores the audience, through lines he himself wrote, to give Poochie a fair chance. The writing team is impressed with Homer's statement, and he is led to believe that the comments will be in the next cartoon. Instead, Meyers dubs the line "I have to go now. My planet needs me." into the dialogue, and the animation cel containing Poochie is yanked out of view. A statement attesting to the dog's demise (he died on the way back to his home planet) is hurriedly edited into the cartoon; the in-studio audience cheers wildly as Krusty promises that Poochie is gone for good and signs a law preventing him from ever returning. Homer feels betrayed but, after realizing he never got paid for his efforts, attributes the affair to the nature of show business.
Throughout the episode, a college-aged man named Roy comes to live with the Simpsons. When Lisa remarks that new characters are just a desperate effort to boost shows with low ratings, Roy appears out of nowhere. He has a few minor lines, calls Homer "Mr. S", and at the episode's end, he declares that he is moving out to live with "two sexy ladies".