As streaming services like HBO Max, Netflix and Disney+ plus vie for subscription dollars and YouTube, Xumo, Kanopy, Tubi TV, Vudu and Pluto TV try to take more ad revenue from traditional television, entertainment for kids — and the tech tools that manage their screen time — are becoming more important.
On the streaming side, Netflix has been marshaling its resources for months, poaching talent like Chris Nee, creator of the “Doc Mcstuffins” Disney Channel series, Naketha Mattocks (“The Descendants”) and Kenny Ortega (“High School Musical”) to join its stable of creative talent. HBO Max locked in several years of “Sesame Street” shows, which will be available when its service launches in May. Finally, there’s Disney+, which has racked up 28.6 million subscribers for its service as of February 3.
Recognizing the threat, ad-supported platforms are coming up with their own responses. Some of these platforms also stream the same programs that are available on the subscription services, but as exclusivity becomes more important, audiences and entertainers can expect platforms like YouTube, Facebook and others to spend more heavily on original shows that attract younger audiences.
For instance, Facebook intends to spend $1.4 billion on programming for its Facebook Watch service, according to a report in The Information.
Last year, YouTube announced a $100 million fund to invest in children’s video content — partially as a response to keep happy creators of kids’ content on its platform as it rushes to deal with new requirements from federal regulators. Just this week, details emerged about the fund and the type of programming it will support.
YouTube’s top creators rake in millions of dollars for video diarists, toy reviewers and prank shows. Ryan Kaji, child star of “Ryan’s World,” earned $26 million in 2019, making him the platform’s highest-paid star.
At Pocket.watch, the company that works with Kaji, the executive team saw the writing on the wall and was already moving to develop new programs and entertainers that would fit with YouTube’s new direction.
Still, some investors see an opening for tools and services that can take advantage of YouTube’s government-mandated tonal shift and protections for children more broadly.
In the past week, SuperAwesome raised $17 million for its platform, which provides tools like parental controls, social engagement features, kid-friendly advertising and authentication services. Its services are used by big names in kids’ gaming and programming, including Hasbro, Mattel, Lego, Cartoon Network, Spin Master, Nintendo, Bandai, Omnicom, Dentsu, Niantic and WildWorks.
SuperAwesome is already profitable and is on track to bring in somewhere between $80 million to $90 million in revenue, according to CEO Dylan Collins.
Then there are startups like Encantos, a Los Angeles-based developer of family-friendly, kid-focused entertainment for bilingual audiences. The company has raised a modest $2 million round, but the cash comes from investors like Kapor Capital and Human Ventures.
“We’re one part entertainment in that we’re building character-led family brands. We’re one part technology, because we’re building direct-to-consumer brands,” says Encantos co-founder and chief executive Steven Wolfe Pereira. The final piece of the puzzle is the company’s educational aspect, which teaches Spanish language skills to its audience.
“On one end of the spectrum, you have purely entertainment brands. It’s pure entertainment but lacking the educational substance to it,” says Wolfe Pereira. “Entertainment-driven education content through apps, books, subscription boxes and consumer content… we’re taking the best of entertainment with the best of education and using technology to bring that to life.”
For investors like Kapor Capital and longtime entertainment analyst and advisory firm LightShed Ventures, children’s content is one key to unlocking the new media landscape.
“As consumers shift from linear TV to internet TV, the streaming wars are intensifying and expanding globally,” said Rich Greenfield, partner at LightShed Partners. “Kids and family content is amongst the most valuable content to drive household engagement increasing happiness and reducing churn.”