By Eduardo Henrique 27-01-2015
Children are becoming ‘digerati’ from the cradle onward and, in doing so, are expanding the possibilities and scope of the children’s media industry.
At the same time, childhood mainstays like PBS in the US are struggling to retain broadcast viewership. Together, these trends are creating enormous opportunities for mobile media and entertainment companies to build products that kids can laugh, learn and play with.
Here are three key trends shaping the landscape of children’s media at the moment:
1. The Burden of Bureaucracy
Most of the biggest names in children’s entertainment are massive corporations, or owned by one. Disney is one of the largest and most valuable brands in the entertainment category and beyond. Then there is Viacom’s Nickelodeon and Turner’s Cartoon Network.
These huge companies are saddled with layers of bureaucracy that inhibit their ability to move fast and adapt. Additionally, their traditional business models and distribution channels, partnerships with companies like Comcast, DirecTV and AT&T, impede them from going direct to consumers.
Even though mobile represents a major business opportunity, these companies are behind in terms of the technology, knowledge and speed needed to explore this new model.
For example, last year Nickelodeon revealed that its app underwent four years of development. This is a far cry from the lean, iterative start-up model of Silicon Valley, where apps are often developed in months, and a major reason why these larger corporations are failing to keep up.
That said, even tech-savvy internet companies are struggling to stay ahead of the curve. Netflix and Amazon were built for the web, not for mobile. As tech firms, they have an advantage over content companies because they already have one foot in the digital door.
However, that does not mean they are well-adapted to the mobile space and are now struggling to adapt their desktop model to smartphones and tablets. In addition, their biggest cash flow comes from the web, so there is not a pressing drive to create comparable experiences on mobile.
The result is that these companies do not offer great digital experiences, especially for kids under the age of five. Their sluggishness on mobile leaves room for others (and outsiders) to swoop in and gain market share.
2. The Google Effect
Google recently announced its intention to create a suite of its products just for kids. Google primarily makes investments in big trends and long-term initiatives that present significant growth opportunities down the road. Its investment in kids’ products is a clear signal that this market is going to be massive.
In addition, Google’s actions will boost the start-up ecosystem for this sector. Google’s investment in this space means there will be more opportunities for younger companies to get acquired. This will cause more venture capitalists and angels to invest in businesses that focus on kids because they see greater potential for an exit (and thus returns). This, in turn, will inspire more entrepreneurs to build child-centric companies and increase their likelihood of success.
Another outcome of Google entering this sector is that it will force its competitors to differentiate themselves and define their position in the market.
For example, what are Apple’s plans for kids? What will Facebook’s child-only initiatives look like in the future? Will Microsoft launch a suite of products that are kid-friendly? These tech giants won’t want to miss out on valuable revenue streams. Every effort they make to appeal to this lucrative and growing demographic will support growth of the market overall. Google’s interest will have a ripple effect.
3. Start-ups Take the Lead
Learning games are currently a US$1.5bn market and Ambient Insight predicts it will hit US$2.3bn by 2017. Most of this growth is driven by mobile devices. Mobile media and entertainment are transforming the children’s media landscape and creating a goldmine of new opportunities. As explored above, the big-name brands have not been quick to take advantage of these opportunities.
Mobile is a fundamentally different medium to television or the web, and it already has a bigger audience than both. Creating engaging mobile experiences for kids is not as simple as making a few tweaks to a non-mobile product.
Mobile-first app developers understand this. While their larger counterparts are figuring out how this whole mobile thing works, start-ups like Toca Boca, Originator, MarcoPolo Learning and Movile have swooped to fill this void.
Start-ups are driving innovation for children’s media on mobile while big-name brands struggle to catch up in their wake. As the ecosystem grows more robust, and the market for child-centric mobile products grows bigger, this will shift the balance of power within the industry.
I predict that start-ups won’t be disrupting the incumbents so much as paving the way forward.