Youtube, streaming wars, and children

Impact of Youtube ending targeted ads on kids content.

Hiroo Aoyama
Nov 16, 2019 · 8 min read

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Children under 13 are up for grabs.

On September 4, 2019, it was announced that Youtube’s parent company Google will pay a record $170 million to settle allegations by the US Federal Trade Commission that Youtube was violating Children’s Online Privacy Protection Act (COPPA) Rule. Essentially, Youtube was collecting personal information from children under 13 without their parents’ consent and leveraging that information to deliver targeted ads. Big yikes.

Three days ago, Youtube announced these upcoming changes:

  1. Youtube will start to use machine learning to help identify if the video is kids content or not (also applies to videos uploaded in the past.)
  2. Once labeled as kids content, the video will not have features like comments, notifications, and targeted ads.

I talked to several Youtubers about these changes, and they and their wallet seem to be scared.

  • No notifications means that your subscribers aren’t going to know when you publish new videos, resulting in less views and watch time.
  • No comments means that you can’t connect with your community.
  • No targeted ads means you earn less money through AdSense and any advertisement.

They shared that they will start to avoid making videos that may be marked as kids content, although they have no clue how to do so. This new mentality may drive any kids content away from Youtube.

No kids content means no more kids coming to Youtube.

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There are approximately 55 million children under 13 in the United States. Sure, not all children have access or use online technology. However, in 2016, Family Zone conducted a study to look at what apps parents allow their children to access during free time. Children from 0–8 spent 65% of online time on Youtube and children from 9–12 spent 38%.

That’s a lot of children and a lot of time. The question is: Where do they go now?

Mickey Mouse and SpongeBob want your children.

Those children who were watching Youtube aren’t going to naturally start playing soccer or doing homework. Those children will still want to watch videos on their $400 iPad with $250 AirPods Pro or wherever Gen Z watches videos these days.

Meet streaming wars. We’ve got streaming players like Netflix, Hulu, Amazon Prime Videos, HBO Now, CBS All Access, Apple TV+, Disney+, and Facebook Watch. All of them are pouring millions to create or license new contents for higher user acquisition and retention rate. And for many parents, these players are truly an amazing gift to let their children play a random episode of Daniel Tiger’s Neighborhood while knowing that their children won’t be exposed to inappropriate videos or seeing malicious ads like on Youtube Kids.

There is already a trend for these streaming players to acquire specifically children. Disney+ has both a deep catalogue of children’s classics and newer children-friendly movies and series. Two days ago, Netflix and Nickelodeon announced a multiyear partnership that may result in a SpongeBob Squarepants spin-off.

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But these players would need to do much more to obtain the attention and ultimately the subscriptions from the children and their parents. Here are my three suggestions: introduce new content vertical, increase marketing visibility, and redesign the landing page.

1. New Vertical— Educational Videos

I talked to several parents and they seem to be okay with their children watching Youtube for one reason: sometimes, the videos they watch are educational. There are two ways to go about this.

MasterClass Style: Hype instructors

MasterClass is an online education platform where you can access tutorials and lectures pre-recorded by experts in various fields, including Gordon Ramsay teaching cooking and James Patterson teaching creative writing.

The focus is more on the instructors and less on the contents. For example, when I was in 4th grade, I wasn’t particularly interested in science, but Bill Nye the Science Guy changed my whole perception. I was watching his funny take on science experiments and his skits on scientific histories — I was watching science, and my parents loved that.

Building content from scratch may not be scalable in the long term, but building a brand around instructors to produce content can go a long way. My idea? Weekly LEGO session with Captain Underpants on Netflix.

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LEGO is an okay idea but I’m not so sure about Captain Underpants for internationalization.

KhanAcademy Style: Interactive

Khan Academy is a non-profit educational organization with the goal of creating a set of online tools that help educate students. Students can watch short lessons in the form of videos and also interact and complete practice exercises.

Interactive video? Last year, Netflix experimented with this style with Black Mirror Bandersnatch. But think bigger. Back when I was in Japan and in kindergarten, my parents subscribed to Benesse’s Shimajiro program that sent toys and workbooks every month. They were also accompanied by video tutorials to learn how to build and play with the toy or complete the workbooks. That is a true interactive educational content with digital and physical presence.

Yes, children would prefer watching Marvel than Khan Academy videos about multiplication. But what about Marvel themed multiplication videos and worksheets? Parents would love this and subscribe right away while children would enjoy the content and learn at the same time.

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Or draw and build Avenger-themed castle, could be more fun than solving 6 x 7.

I prefer Captain Underpants.

In terms of the benefit-cost ratio, producing physical toys and workbooks may be an overkill. The benefit of having educational videos alone is already sufficient to fulfill the demands for educational videos from the parents. Streaming players should consider various partnerships to enter specific educational market, such as LEGOS as mentioned or making fun language education series with Duolingo and characters from Sesame Street.

2. Increase Exposure

Say, streaming players have now created new contents and incentives for parents to subscribe and let their children watch there. The next focus is on where they can put marketing efforts to pull people in.

Grocery Stores: Mickey Mouse on your milk

Three days ago, America’s largest milk producer, Dean Foods, filed for bankruptcy. Putting my personal opinions that I like milk and I feel sad aside, I feel that there is a big opportunity to collaborate with these grocery store items that parents buy as an aggressive entry point. Japan already does this with Pokemon-branded Daiichi Bread, where each bread comes with a Pokemon sticker.

Imagine you are a mom or a dad who buys milk each week, and you see one that has a character from a Netflix kids’ show. Perhaps, it even has a QR code inside the package (maybe cereal, not milk) that you can scan to see what contents are available or start a special free trial. It’s a good marketing tactic to capture parents and children, and it’s a win-win situation for both the streaming player and the grocery store item.

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If I was a kid, I would force my parents to pick these over any other milk.

Lyft: Hi, this is your Lyft driver and here is Snow White

Uber and Lyft just can’t seem to earn money — they have to reduce the cost for the riders to beat the competition and increase the pay for the drivers to satisfy them and the laws. In China, taxis have additional revenue source that Uber and Lyft have not yet looked into. It’s ads.

Taxis in China have built-in TV screens on the passenger seat, and it is led by a media company called Touchmedia. I think it’s clear that this idea is too wild, especially since Uber and Lyft use people’s personal vehicles, so installation of a screen may be trickier than it was for Uber Beacon. But otherwise, trust me, it’s not that bad (I lived in China for 8 years) and you can turn the screen off. There’s no camera either like Facebook Portal, it’s just there to show ads — No, the Chinese government isn’t monitoring this time.

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It’s going to cost a lot to install screens on Ubers? Negative cash flow, we love it.

I prefer Disney milk.

Brand is about all the emotional and tangible touch-points surrounding a product, as Scott Galloway explains. Spending money on online advertisement like on Youtube can obtain emotional connections with teens and adults, but it is not well-blended into the lives of the children and their parents. It is important to understand the user journey and persona of the target audience and establish good branding around people’s everyday items — like milk.

3. Upsell that your platform is children-friendly

This is targeted towards Netflix. Netflix’s landing page simply says “All of Netflix. Free for 30 days.” with a giant button that says “Try 30 Days Free.” As a product designer myself, I understand that through A/B testings, Netflix discovered that by removing its content library or any pictures of its movies and series, the number of people starting the free-trials has increased (perhaps, since people used to look at the pictures, think if it’s really worth $8.99, and leave to make that choice later).

However, more efforts need to be put on the landing page to give that one last push for the parents or anyone to start their free trials. I think Disney+ did a fantastic job with their promotional video that basically compiles all of its offerings (Toy Story, The Simpsons, Ironman, etc), and it resulted in 10 million subscribers on the first day of launch.

Netflix can also look into creating these but tailor towards various customer segments. Here is my design.

Landing Page: If you are a family, *insert video.

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The video would be a compilation of top movies and series in the family category.

Out of all ideas, I prefer this one.

The solution here isn’t solely the additional FAQ section; rather, it is the idea of producing new advertisement for Netflix using existing movies and series to acquire specific customer segment. Currently, Netflix focuses on one movie or series at a time — that may have worked before, but with the recent increase in competition, Netflix needs to sell how it has enormous range of content library compared to other streaming players. By doing so, it can tap into the family segment (perhaps a billboard with various cartoon characters on Netflix) to achieve the the goal of acquiring children and their parents.

Thank you so much for reading so far. Please be aware that these are all personal speculations with a lot of assumptions, and I am not part of any of the companies mentioned above. I had a lot of fun discussing ideas with people and thinking about how streaming players like Netflix and Disney+ can acquire children and their parents, since Youtube may have less and less kids content on its platform.

If you wish to read more about my opinions and ideas on startups and tech companies, feel free to follow my publication: Random Daydreams. Hope to see you around.

Random Daydreams

I’m Hiroo, a product designer.

Thanks to Wardha Mowla

Hiroo Aoyama

Written by

Incoming Product Designer at Facebook, I design and write —

Random Daydreams

I’m Hiroo, a product designer. This is simply a space to ramble about my random daydreams on startups and tech companies.

Hiroo Aoyama

Written by

Incoming Product Designer at Facebook, I design and write —

Random Daydreams

I’m Hiroo, a product designer. This is simply a space to ramble about my random daydreams on startups and tech companies.

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