The Hollywood Reporter - 12.02.2020

The Business

THE HOLLYWOOD REPORTER 44 FEBRUA RY 12, 2020

COLLINS: COURTESY OF SUPERAWESOME.

Analysis

Illustration by Rami Niemi

B

ack in 2013, when Dylan

Collins went fundrais-

ing for his kid-safe tech

startup, SuperAwesome, he was

surprised by the lack of interest.

“No one really was interested

in having a conversation about

digital privacy in Silicon Valley,”

says the CEO. “We realized that

kids were a blind spot for most of

the big technology companies.”

Ultimately, not a single investor

would finance his suite of tools to

help childproof the internet.

In the seven years since, kids

largely have abandoned legacy

media for online entertainment

at a rate that the technology

industry no longer can ignore.

In 2018, for example, children

under 18 represented more

‘A Huge Demand’ for

Kid-Safe Content

Once a ‘blind spot’ for big tech, video sites for children are

booming as YouTube and others invest heavily in family fare:

‘You’re going to see a huge wave of development’

bilingual preschool brand

Canticos, has raised $2 million in

seed funding to expand its focus

on multicultural storytelling.

“We hadn’t been planning to

raise any capital,” says Collins,

revealing that SuperAwesome

is on track to hit $100 million in

revenue this year. But, he contin-

ues, “Having one of the world’s

biggest technology companies

investing in the kid-tech category,

it really does send a signal.”

Entrepreneurs recognized the

opportunity to invest in digital

kids programming years ago as

parents began to eschew basic

cable stalwarts like Nickelodeon

and Disney Channel for on-

demand platforms like Netflix

and YouTube. “There’s a huge

demand on any platform right

now for kids and family content,”

says René Rechtman, co-founder

and CEO of Moonbug, which

acquires and distributes chil-

dren’s programming to platforms

including YouTube,

Netflix, Amazon and

Hulu. He describes it

as “retention con-

tent,” explaining,

“Sports will drive

subscribers, and kids

and family content

will make sure the

subscribers stay on

board.” Just look

at Disney+, which

amassed 28.6 mil-

lion subscribers in

three months largely

because of its family-

friendly library.

Attention to kids’

content providers has

grown in recent months, since

the Federal Trade Commission’s

$170 million settlement with

Google-owned YouTube over

allegations that it collected the

personal information of chil-

dren under 13 without their

parents’ consent, a violation of

the Children’s Online Privacy

Protection Act (COPPA).

As a result, on Jan. 6, YouTube

began restricting targeted ads

and turned off comments on

kid-centric videos. Though some

than 40 percent of all new

internet users globally, per

PricewaterhouseCoopers, and

some experts estimate that

soon they will make up half of

all people on the web. But with

regulators cracking down on sites

like YouTube over ads targeting

underage users, the need to create

protected environ-

ments for kids

inside the vast (and

often seedy) digi-

tal world has never

been greater.

That’s put companies focused

on the kid-safe media space in

high demand. Now, London-based

SuperAwesome is fielding interest

from companies like Microsoft,

which made a $17 million stra-

tegic investment in January.

Meanwhile, Encantos, the media

company behind animated

DIGITAL | NATALIE JARVEY

NATALIE JARVEY is digital editor

at The Hollywood Reporter.

individual creators have said

they’ve seen a decline in viewer-

ship as a result of the change, it

has largely had the reverse affect

for established brands. Encantos,

for example, has seen viewership

to its Canticos YouTube channel

triple in the past month, says CEO

Steven Wolfe Pereira. And Pocket.

watch — which has begun selling

YouTube advertising inventory

alongside brands like Ryan’s

World in a COPPA-compliant way

— expects ad sales to increase as

much as fivefold this year.

YouTube, which made $15.1 bil-

lion in revenue in 2019, will

counterbalance the negative

impact on some creators’ busi-

nesses by investing $100 million

into original children’s pro-

gramming for the YouTube Kids

apps. In a brief sent to partners,

which a source shared with THR,

YouTube said the funding will

roll out over the next three years

and will be given to “differenti-

ated, high-quality

kids programming

that aims to enrich

and delight our young

audience” between

the ages of 3 and 8.

YouTube’s settle-

ment with the FTC

is likely to place

increased scrutiny on

the entire kids pro-

gramming space, but

many executives say

they ultimately see it

as a positive because

it will help boost

content providers and

platforms that are

focused on creating

safe spaces for children and that

comply with COPPA.

“The broad interest in the

space is growing and will con-

tinue to grow,” says Pocket.

watch CEO Chris Williams. Adds

Collins, whose SuperAwesome

launched ad-supported video

streaming platform Rukkaz in

July, “I think you’re going to see

a huge wave of development and

activity in free ad-funded online

video for kids in the next two to

four years.”

Collins

By the

Numbers

$15.1B

YouTube’s

2019 revenue

$100M

YouTube’s three-year

investment in content

for kids ages 3-8

$100M

Kid-safe tech startup

SuperAwesome’s

projected

2020 revenue

$17M

Microsoft’s January

2020 investment in

SuperAwesome