Latest / The Media Odyssey / HOW TO FIX KIDS CONTENT

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HOW TO FIX KIDS CONTENT · The Media Odyssey

• Evan Shapiro: [00:00:00] Welcome back to the Media Odyssey podcast. That is Marion Ranchet. Marion Ranchet: And that is Evan Shapiro. Evan Shapiro: It's good to see you. We've both been traveling. You've been in Germany, I've been in Dublin which I'm about to get some shit for from our guest. But we're [00:00:15] very excited, both of us today, to have somebody we've wanted to have on and haven't yet. Someone who is an expert in a part of the content economy that has a tremendous amount going on and some issues facing it which is the [00:00:30] Kids content economy but also just generally speaking an engagement expert about streaming right now. Marion Ranchet: Yeah that's our friend, Emily Horgan.[00:00:45] Emily, welcome on the pod. Emily Horgan: Hey guys. How's it going? Evan Shapiro: Good. How are you? Marion Ranchet: Good. Good to see you. [00:01:00] Emily Horgan: I'm picking bones, Shapiro, because you were in a pub on TikTok Talking about kids content in Dublin- Evan Shapiro: In Dublin... Emily Horgan: Without me. Yeah. Evan Shapiro: I don't know. Emily Horgan: That [00:01:15] hit my FYP and I was like, "Dude, what's going on?" Yeah. So I'm glad that we had this booked. Evan Shapiro: I forgot you lived Emily Horgan: So you can make amends publicly. Evan Shapiro: I forgot Ireland is not officially part of the UK and I confuse where people live, 'cause I'm American and that's what we [00:01:30] do. Emily Horgan: Okay. Don't go digging in that hole now. I'm just glad, I'm glad we have it on Evan Shapiro: It's not an excuse.... Emily Horgan: You publicly apologize for the Evan Shapiro: I am very sorry, I did not look you up. 'Cause I split the G twice, in a pub in [00:01:45] Dublin and no one was there for me to prove it. Emily Horgan: Buddy that would've been two good Guinnesses. Evan Shapiro: Yeah. I'm still digesting them right? Emily Horgan: Yeah. Robust. Robust. They'll, yeah, they'll fill you up. But listen guys, great to [00:02:00] thank you so much for having me. Great to be here. Evan Shapiro: And I will admit, this was Marion's idea, not mine. So even adding insult to injury. Marion, what was the sense of urgency for you? I think it was Emily's newest report that was the inspiration to get her on the pod yeah? [00:02:15] Marion Ranchet: Yeah so she's a friend. I think we've actually started pretty much at the same time and this thing, this magic thing of people being open and just deciding to have a coffee and then compare notes on stuff. And I do [00:02:30] Have to apologize because that's something that I can easily do, unlike you. I'm sorry we didn't bring you on earlier, 'cause honestly, you're the OG with Jo that we had on the pod last year. I'm not making this any better on us. But Evan Shapiro: No you're digging the hole deeper. Marion Ranchet: [00:02:45] I'm digging the hole. I'm digging the hole. But it does mean that we love the team and we love to talk about kids media. And of course, yes it's the report by Emily and her team. We'll speak a bit more about that but man, there's so much in there. [00:03:00] People will get a glimpse but I hope that you will be able to direct them to actually go and and get that for themselves. Emily Horgan: Yeah. Yeah. Thanks so much. Yeah. The Netflix Kids Content Performance Report is something that I publish twice [00:03:15] a year. It's born out of the throes of writing about the industry, like both of you guys do right? And I write a, also write a newsletter called The Kid StreamerSphere on Substack. And [00:03:30] the Netflix Kids Content Performance Report is the next level of that so if the newsletter is like the dorsal fin of the shark, the report is the shark. It's based on Netflix's publicly available, data. Obviously they [00:03:45] publish the engagement reports twice a year as well as the top 10s as well as their trending data. But I overlay that with the proprietary database that I've built because I've found through the years whenever I look at research [00:04:00] about kids content that's not done by kids media practitioners, I feel like I'm correcting somebody's homework. Yeah we built the database with a set of folks with a real background in kids media so we kinda, we know the [00:04:15] nuance, we know, Evan Shapiro: So what's in that database that you compare with the Netflix data dump? What are So you don't have to give us your proprietary secrets here but what's the mix? Emily Horgan: We editorially tag all the kids titles right? And we and then we decide on we [00:04:30] decide, we use our editorial judgment and our background in the industry to to understand where they would go and say like, a content pipeline or slots at a commission, commissioning slots and stuff like that. So we break it out into preschool content, we break it out [00:04:45] into comedy animation, action animation, fantasy animation. Obviously creators are big, are huge on Netflix right now, kids creators in particular. We also look at digital-first animation. So we're editorially tagging up all of the [00:05:00] titles, which helps makes, helps make them comparable because anyone who's who's tried to dive into that data will know, it's 18,000 lines and even in a world of ChatGPT, you need to know the detail of what you're talking about to get something that's [00:05:15] helpful and actionable and that's what our clients, that's what we deliver to our clients. Yeah it's that editorial point of view that we're very comfortable making because, I've been in kids programming for guts of two decades at this stage [00:05:30] yeah that' Evan Shapiro: Wow, since you were six. Emily Horgan: Yeah I know. I know. I was still on the Guinness then though so it's fine. Evan Shapiro: And is this the am, I if I got this wrong we'll cut it out of the episode but my understanding is this is the first time you've tracked family and teen live [00:05:45] action as part of this or is that a mistake? Emily Horgan: No that's true. So we've, we started off looking at animation because the the animation production industry is a really specific, has really specific needs. And then we've looked at live action [00:06:00] over the time. Netflix don't commission a ton of original live action for kids right? And really don't necessarily acquire a ton of original live action for kids. So that hadn't been top of our do list. You know yourself, when you're building [00:06:15] the boat around you in terms of what you're gonna look at next as a commentator right? You can't look at everything 'cause we've got small teams. But the live action piece really came into focus around the Paramount-Warner merger. Particularly [00:06:30] looking at Paramount that's where that kind of came into clarity and so we've looked at live action in this latest report in depth, which shows the strength, the continuing strength of those Paramount Nickelodeon live action series. So the [00:06:45] Thundermans, Sam & Cat right? These are series that are a decade old that audiences are still finding. So that was one of the motivations behind that, was to see if we're able to quantify how much these types of series are [00:07:00] delivering, from a premium streaming perspective. And we can say it's a lot and we can say there's definitely still appetite out there for them. Marion Ranchet: And so you've been doing this for a few years now. I'd say two years perhaps. What are the key... 'Cause it's [00:07:15] a 35-page long report so I don't think we're gonna get into the whole thing and they should not. They should go to you for that. But if you had to find perhaps five things that really caught your attention this time around versus previous [00:07:30] edition, what would that be? Emily Horgan: Do you know what? The funny thing is that this time around something caught my eye that hasn't caught my eye since the first edition right? And I think that's also telling right? So the first edition and I remember talking to you about this in a cafe in Cannes and being "I'm thinking of [00:07:45] doing this. Is this crazy? It's gonna be a lot of work. I've already like..." So yeah. But I remember, doing that first one and in that first report if you remember, I said to you the crazy thing here is, we look at the top 10 of Netflix kids shows and a vast majority of them are from, are YouTube [00:08:00] originated right? Marion Ranchet: Yeah. Emily Horgan: And so that was one of the key takeaways from the pilot report. And that was in the that was in the heyday of Cocomelon on Netflix where it was, like, doing 600 million hours viewed and stuff. And we all knew the Cocomelon story but it was the [00:08:15] deeper story about the volume of other digital-first animated IP that were coming that were showing up. So that was one of the first stories and obviously since then, Cocomelon, its footprint on Netflix has has declined. It's still [00:08:30] huge. It's, I feel like 2023 was probably still pandemic hangover viewing in terms of the volume and stuff. But create, digital first animated content had become less in focus. And obviously creators had [00:08:45] jumped in 2025 so Ms. Rachel being the biggest thing that we've ever tracked in this data in terms of a kids show to hit Netflix. And so everyone knows about Ms. Rachel. People are talking about it in the wider industry. But the other thing that we saw in this [00:09:00] latest round of data is that actually there's loads of digital-first IP that are taking up space on Netflix. So there's things like Sheriff Labrador, ChuChu TV is a new one that's gonna launch soon, Jose [00:09:15] Comelem, Plim Plim The Kindness Hero. So there's, you know. Evan Shapiro: And these are all shows that started on YouTube? Emily Horgan: Yes, correct. Started on YouTube or started in apps. So Sheriff Labrador is from an app company out of China so it's like a more of a [00:09:30] multi-platform play but it's still digital-first animation that's I would as I would term it. Marion Ranchet: So Netflix is definitely not producing the next wave of kids media content. It's everything's coming from YouTube or else as you were [00:09:45] saying. Emily Horgan: The thing- Marion Ranchet: How come? Emily Horgan: Yeah it's, interesting. So there's Netflix originals. There's so there's two major Netflix originals that I would point to. One is Gabby's Dollhouse, which is, again, like the OG Netflix franchise that people think- Evan Shapiro: And that was a top five, and [00:10:00] that was a top five, in Emily Horgan: Yeah. Yeah it is. Yeah And it's been big ever since, we've been tracking this data. But it's supported by the team at DreamWorks right? It's the DreamWorks team that are building that franchise. And then there's the Creature Cases, which is lesser-known, owned by [00:10:15] Sony. It's lower than the, lower down. I think it's more like 10 or 12. And those are two preschool franchises that originated on Netflix but they originated, like five, like five, six years ago. So newer stuff [00:10:30] we're not seeing come through the pipeline but there are a number of different things that Netflix are doing. Obviously they're strong on licensing this stuff from YouTube. They're very strong, they're happy to license IP, anyone's IP that's big right? So [00:10:45] the big shows on Netflix, you probably know, they're Paw Patrol, Peppa, Miraculous Ladybug. They're all big shows that are being built by other people. And that's not necessarily... That's a strategy that works for them but I definitely don't see [00:11:00] them as being in the business of building the next kids' IP directly right? K Pop Demon Hunters aside that's a different kind of case study. Evan Shapiro: But that was an, even that was an accident. They didn't... Emily Horgan: Correct. Yeah... Evan Shapiro: They had no idea they had there. That was that was a, to a certain extent, a cheap- [00:11:15] purchase that they made, correct? Emily Horgan: Yeah that was lightning in a bottle and it's a great movie. It's so fun and it's got just enough edge to be cool for older kids. But yeah, like we have to believe that the [00:11:30] evidence would point to that not being part of a strategy. Although they are working hard to capitalize on it now. Evan Shapiro: It is now. Obviously, right? Emily Horgan: Yeah Exactly. Yeah. Life gives you lemonade so you don't even have to make it you just sell it. It's fine. Evan Shapiro: Although it takes a long time to [00:11:45] remake that lemonade for them right? Emily Horgan: Yeah. Then you need to go back and you don't know what the formula was and et cetera. Marion Ranchet: Yeah but how come right? Is it a lack of interests? Is it a lack of imagination and creativity on the part of [00:12:00] the teams? Because like this is the, one of the biggest platform in the world. One might argue that it should be actually a major focus of theirs to mix and match right? License and produce. So why [00:12:15] the, the disinterest, especially it's cheaper to produce kids content than it is to do all of those big shows that actually sometimes don't travel all that well across the globe. Evan Shapiro: And if I can double click on, if I can double click on that. Is it a [00:12:30] disinterest or a deprioritization? Is it a deprioritization of, that's a hard word to say, of kids content? And do you see, I did a report earlier this year on the kids content landscape and it and which you helped with by the way [00:12:45] which showed that commissions of streamers in particular and pay TV outlets are down. So is this an industry-wide kind of kids are nice but they're not the main thing anymore? Emily Horgan: Okay there's so much to unpack with this right? So first of all, from a Netflix perspective, in my [00:13:00] observation at least, they are very North Starred on streaming right? That is their business. That is what they hold as their direction of travel for whatever they do. I think you can see that somewhat in what happened [00:13:15] with the Warner, the attempted Warner acquisition. So their North Star focus is streaming. When you're talking about building teams that diversify away from that, I just don't think they they see that, it seems that they see that as detracting from what [00:13:30] their sole focus is, which is to drive streaming. Now that could be a limited strategy in the long term right? Streaming has a has a ceiling. They're obviously trying to trying to get there. But ultimately that's what I, it's not that they are like [00:13:45] "Ugh, kids content, whatever." It's just "We need to do what serves streaming and building franchises, building consumer product teams, building all this other stuff is maybe less of our focus." Now obviously there's some change happening with that with again, K Pop Demon Hunter's coming out. They're starting to ramp [00:14:00] up some franchise on some of their other titles, everything they do in the franchise sense always feels to me like it's in service to pushing streaming, even like Netflix Shop. And that's, it's a cool experience but it's not a hyper commercial [00:14:15] direct to consumer product play. It's like it's more experiential for the streaming experience so that they can send people back and people are feeling like they're getting more value out of Netflix as a streaming service. In terms of competing and like [00:14:30] commissioning and a broader question of whether they should be commissioning more, what I would say based on the data that we can see is like Peak TV has served kids very well and the top 10 [00:14:45] or the top 15 of Netflix shows are all shows that are have been around for five years minimum, some 15, some 20, some 25 when you're talking about SpongeBob and that content still really resonates right? It's, I think about it a [00:15:00] bit like a garden or a park right? These are all like trees that were planted and they're there taking up air and taking up light and taking up oxygen. And then if we need to maybe flip the idea of this pipeline question that Hollywood has been very focused on. It's been the [00:15:15] model in Hollywood. It's this pipeline. You create new shows every year but when you're trying to compete with SpongeBob, who's 25 years old and has the in of parents and has the in of your older... Evan Shapiro: And has hundreds and hundreds of episodes. Emily Horgan: Right. Exactly. You need to be really [00:15:30] intentional about when you're gonna make a play for a new IP. I'm not saying it's impossible. It's definitely possible. Ms. Rachel has come up, Bluey obviously. Even Sheriff Labrador is pretty new right? So there's ways of doing it but you need to be really, intentional about it and just, flushing [00:15:45] new series or new IP and new seasons of stuff down the river, year in year out, I just, I think it's too competitive in the kids' set. If you're gonna go plant a tree in the garden, you need to be willing to tend it and willing to build it and if you don't have the [00:16:00] systematic apparatus to do that then it's less appealing, particularly when you can buy off the peg, other stuff that's been that's already been made because the thing that Netflix can offer those folks is they have the biggest premium shop window in the world.[00:16:15] And you contrast that with somebody like Disney who are so systematically bought into kids and family right? It's been funny, I'm, I'd, I was at Disney for many years out of the London office and [00:16:30] one of the things about going independent and dealing with other organizations is you have to make the case for kids and family when you're going into other organizations. Public service broadcasters, you have to say, "Ugh, we need more money. Ugh, we need an exception for YouTube. I know the YouTube rights work this way for [00:16:45] drama but we need..." And they're like, "Oh, you're that's a small little thing," "Why would we make it why would it make a difference for you?" whereas at Disney you never had to make the case for kids and family right? It's systematically bought in on a business level, Marion Ranchet: So that means that Netflix is keen on being the stage, the [00:17:00] global stage but not the lab, which takes us to the lab being YouTube right? For many, you've said it it's not just YouTube, it can grow in-app but given that this is the biggest video platform in the world, YouTube is [00:17:15] that lab. How do you think this is gonna evolve? Because I have a feeling that you know although YouTube says they're not a platform, they are getting anxious about the fact that a lot of their, a lot [00:17:30] of the talents and IP are being, created and nurtured and then they're being taken somewhere else may that be Netflix, et cetera. Is there a moment in time where that strategy from Netflix if YouTube says, "No more," [00:17:45] when, then what does Netflix do? How do you see YouTube evolving on that topic in the coming years for your part of the ecosystem? Emily Horgan: Yeah. Yeah. YouTube is definitely one of the labs, I would say. One of but [00:18:00] one of the issues that I see with YouTube as a sustainable lab is that the revenue markets for kids content on YouTube have collapsed in the past five years. So although we are still seeing new content come from YouTube, I feel [00:18:15] like the pipeline that would've been there five years ago will have been massively impacted right? Evan Shapiro: Where is the next Ms. Rachel gonna come from if you can't grow your business there? Emily Horgan: Exactly. And to be fair, she did build, she she did manage to build it in this ecosystem right? So she's, [00:18:30] she did the majority of her building since 2019. So proving it is somewhat possible if you have the right type of drive. But ultimately, that mom and pop Beck the Shark kind of moment, for YouTube kids content anyway, [00:18:45] is a lot more elusive because you don't have... There was a period where there was tons of animated IP coming out of YouTube. Super Simple Songs, Carl the Car, Carl's Car Wash, Gecko's Garage, loads of the stuff that that [00:19:00] Moonbuggy went and acquired. Evan Shapiro: Cocomelon. Emily Horgan: Exactly. The, making the YouTube economics work, particularly for preschool content as well is really difficult. I think that's a challenge that both YouTube and to be honest [00:19:15] Netflix should be considering. Evan Shapiro: And let's talk let's talk about why that happened. So the monetization of advertising on YouTube for kids content fell apart because of regulation that was introduced and it seems as to as if to me, YouTube [00:19:30] has corrected to stay well within the guidelines that have been created. Is that is that reading correct? Emily Horgan: Yeah that's something I'm hearing for the people who are in the detail of it definitely. And I think there's, it also goes with the general [00:19:45] feeling towards ad, advertising environments for kids right? That a load of advertisers got the stink of all this regulation, massive [00:20:00] fines to YouTube. Ugh. Do we need to be advertising to kids? If we don't really need, like capital N, to be advertising to kids, let's not because you know what? We can get mom on her phone now anyway. Like that whole, the viewing, the the [00:20:15] viewing, there there's other, maybe other solutions to the co-viewing experience that allow you to access mom and dad without having to go, to TV right? From an advertising point of view. So I do think [00:20:30] that that kind of perception around the like any sort of digital advertising to kids will have impacted, the, also will have impacted the viability of who was coming through. If you don't really need to be advertising to kids, if you're not like a toy company or something [00:20:45] then do you wanna do you wanna fall foul of that type of of that type of the kind of regulation and stuff. And it's a shame because parents, when they're connected with kids and we we can see, I've seen studies where like viewing is a [00:21:00] really is a really great place to reach audiences. And kids also, particularly six plus kids have massive opinions about what what their family should and shouldn't be doing and influence in their family about what's, where they are and [00:21:15] aren't going on holiday or whatever, where like they are little, they all anyone who's got kids knows that if they've got an opinion, within the family, it will be heard. Yeah it's, I think it's twofold on that in terms of the revenue opportunity. [00:21:30] And that's, it's a real, it's not something that's coming home to roost now but I think it is something we'll see come home to roost in the next five years. Marion Ranchet: The challenge is that this perhaps started with YouTube and this is where, the [00:21:45] majority of kids spend a lot of their time but this fear on the regulatory component, it's actually pregnant everywhere where there's actually advertising in the mix. So when you look at the AVOD or FAST ecosystem, they have similar [00:22:00] challenges. This is the one case where platforms have no problem giving you the inventory share and tell you, "Yeah just sell and cut me on it." Evan Shapiro: And sell it yourself. Yeah. Exactly. Marion Ranchet: Yeah exactly because they are incapable. Evan Shapiro: And it's pay TV too. It's pay TV too. Yeah. Here in the US, the [00:22:15] pay TV channels dedicated to kids, Nickelodeon being the most notable one, but they are having the same issues because, to your point, there's the regulatory chill that gets put over the kids' content arena but then everybody overcorrects. Yeah. And so [00:22:30] they've yanked all these dollars out of the ecosystem across the.. Emily Horgan: And tell me, who doesn't think nostalgically and happily about Saturday morning cartoons right? We all grew up with great kids content and I think [00:22:45] pretty much everybody wants to have great content for their kids to be watching. Bluey is like best in case example of that right? Of content that's funny and fun and connects with different audiences and is, you know. Evan Shapiro: And does really well with adults. Yeah [00:23:00] exactly. It had half its viewing comes from people outside of the age demo who are co-viewing. Yeah. Emily Horgan: Yeah. Exactly. Evan Shapiro: And that seems to be a component to most successful, that cross-pollination, that, and SpongeBob being a great example. Yes. Emily Horgan: Or even the Nick, Evan Shapiro: SpongeBob, Nick [00:23:15] through the long history. Emily Horgan: Yeah. Yeah. Evan Shapiro: And that co-viewing, the, there's a joke for dad and mom and there's a joke for the kids and they both walk away with shared experiences but different takeaways. But I'm interested [00:23:30] in what we think the fix might be. Marion Ranchet: Yeah. Evan Shapiro: Do you know what I mean? I, you and I are gonna both be on stage at MIP Junior, just a couple days after this podcast drops, in Cannes. I'm actually gonna talk about hopeful things. I'm gonna [00:23:45] show case studies, Steven and Parker, Bluey, Sesame Street, of shows and IP that have managed to break through this moment of chaos in the kids' content ecosystem. But what do, [00:24:00] one of the things I'm also gonna talk about is holding YouTube responsible. Now that they're the largest kids channel on the planet Earth, you gotta fix what you broke, man. And so what do you think is the solution for the YouTube platform? Let's start there. [00:24:15] Emily Horgan: Ugh. Yeah I have such, I absolutely adore YouTube on one side because it's a platform that like literally got me into nonlinear thinking and I love the, like the fact that anybody can make content and upload it and some of [00:24:30] the, I love that creativity that comes through and the democratization of it the fact that I love what it's done. I actually know, this might be unpopular, but I love what it's done to that conversation around what is quality content and what isn't. Because there's a lot of people at MIPCOM [00:24:45] who would've come from this traditional TV background, whereas if it's if it's not 50,000 a minute, it's not worth even getting out of bed for. And we see so much in kids right? And [00:25:00] the bottom line is if you have stories and characters that connect, that is quality to me right? That is the most important conversation around quality and YouTube have made that happen by opening the door to so many different people. I think [00:25:15] it's, I really, it will always have a, I it will always have my love for that. But yeah on on the kids media front, I think there has to be questions around monetization for sure. I what the answer to that is, I don't know. [00:25:30] I like the, the issue I've observed with YouTube over the years is that and in other kind of landscapes and systems is that you make a intentioned course correct. You put the dial to a intentioned [00:25:45] course correct and then unforeseen circumstances mean that what you've done actually is done precisely the opposite of what you would've wanted to do. I think that that that's also with I think that there's a good example of that with healthy food guidelines that came into TV advertising back then and then it just [00:26:00] drained a whole load of revenue out of kids' TV and then less TV got made and we started this whole contraction in the first place right? It's trying to do the right thing or find the right dial that would help the revenue conversation I think is key. [00:26:15] I think like, YouTube or we're running a content fund, a 200 million content fund after that FTC ruling. I'm always a big fan of companies putting budget lines behind what they wanna do and budget lines behind [00:26:30] what they value over say, educational programs or principles or whatever right? I think I always you know it yourself when you're looking at these companies, it's part of it is what they say but part of it is [00:26:45] a way bigger part of it is what they do and what a big corporation does is really, ideally measured in the budget that they're committing to putting into something in my opinion. So those are a couple of ideas around around what [00:27:00] they could do on the monetization piece. There is this question of prominence, whether they should be promoting content that's of a certain, again, I say quality, I'm not just talking, I'm not talking budget. I'm [00:27:15] like cost per minute. I'm talking that meets the needs of compliance and meets the needs of what we would want to put our kids in front of. I understand the concerns around that is they don't wanna be a gatekeeper. That's the opposite of YouTube's [00:27:30] ethos is they're not a gatekeeper. But I think when you think about public service broadcasters and looking around that question, I think there's scope to be, there has to be scope to be had there so those are a couple of ideas. And I know [00:27:45] Evan, you had said, in terms of fixing the market, I also think that question of kind of enshrining kids' content spend for public service broadcasters is really important. Marion Ranchet: On the gatekeeper thing, they say they are not, [00:28:00] but effectively when you have so many people watching your platform, you become that you become the gatekeeper. And on the fixing, Evan and I we spoke with the team at Lumi earlier this year when they launched and when you ask them on the monetization portion, they're [00:28:15] essentially saying that there's pipes in the background that are not just fit for purpose for kids content. For monetization of kids content and that YouTube financially speaking has no incentive in fixing this because [00:28:30] it's a tiny part of the overall, the overall ad business. So I think the, one the number one fix is should be this one. And we're nowhere near any progress on that. Evan Shapiro: But what's interesting is that [00:28:45] yes, it's a small part of the advertising pie but it's 15% of their usage. And so they have a responsibility for making Emily Horgan: And it's 100% of their responsibility to make sure the kids are safe right? Evan Shapiro: Yes, it it is. Yeah. And yeah it's a kind of mixed up [00:29:00] conundrum there. I, it's not an easy answer but I also believe, to Marion's point, they haven't really prioritized it. It's not like at the top of the tick list of things to do inside YouTube right now is [00:29:15] fix the kids content ecosystem. Emily Horgan: One of my, one of my favorite, I don't know if you guys have favorite charts. I've got favorite charts. One of my favorite least favorite charts is the chart of YouTube ad revenue since 2019, which has barely had a flutter when this FTC ruling came in that [00:29:30] completely lobotomized everybody's bottom line revenue from an MFK point of view. But yet, continued to climb. So you're like, I understand right? That's, it's corporations right? If they're not being financially incentivized to do this then basically they need to be regulated to do [00:29:45] it because it's not gonna Evan Shapiro: The, I think the missing piece of this is the streamers who are deprioritizing kids content, except these standing legendary pieces of IP or renewing the same series over and over again, the pay TV outlets [00:30:00] that are deprioritizing original commissions, I think what they're missing is the loyalty factor. I don't believe, let's talk about Netflix again for a second. The word around Netflix, the first [00:30:15] half of this year and into the second half of this year is their engagement is really crumbling. Marion Ranchet: Yeah. Evan Shapiro: They're not engaging their consumers at the same level that they did. Something interesting about this report of yours is this is the last time Netflix is gonna issue [00:30:30] their what we watch twice a year. I every time they get bad news, they hide it. Every time. The subscribers, why did they stop telling us how many subscribers they have? Now they're gonna tell us, they're gonna stop telling us as often [00:30:45] what people are watching. Do you think that move is a recognition of just how bad their engagement issue has gotten? Emily Horgan: I do think one of the, Netflix likes to, they tell us the most [00:31:00] right? So they have the most laundry on the line and we get through get to go through their washing- Evan Shapiro: Do they tell us the most? That's not my experience. Emily Horgan: They tell us a lot though, Evan. Come on, 18,000 lines of data twice a year, top 10, top 40 essentially every week right? Okay. No other streamer's doing that okay? [00:31:15] They've had to because they've had to push the corporate narrative of Wall Street, to push these things and to try to stimulate their competitors into following them down the charge. So they have the most dirty laundry in public, which is why we're able to critique their [00:31:30] dirty laundry. Hey, skidmark here right? Which is, which is brave in a way okay? I do think that I think there's a couple of things happening right? We've been through peak, air quote, [00:31:45] streaming wars. The madness of premium marquee television, the fight to the top of premium marquee television, who can spend more, who can see more engagement has, it's still happening but it's not the main event. [00:32:00] And the, those big premium guys are finding what the next thing to talk about is right? I think this is a good thing for kids content because that 28-day obsession doesn't it doesn't usually scan [00:32:15] with kids content. Usually it's 28 months, not 28 days that you build something in, K Pop Demon Hunters aside okay? I'm seeing a few different things on Netflix more recently where they're starting and this is something that I had on one of my [00:32:30] predictions for 2026 that's very niche to kids media that I think, under leveraged or under exposed IP that was rinsed through in the era of the bubble of content, all the content in the [00:32:45] world going through premium streaming. I think there's an opportunity for that content to get resurfaced and rebuilt because it's got the volume okay? It's not launching something from scratch, it's launching something that has a bit of gas in the tank. So there's a couple of IP that I've seen coming through from Netflix. One is Trash Truck [00:33:00] which is from Glen Keane. It was a beautiful, really soft show okay? It was never, it could, I wanna say Bluey took 18 or 28 months. Bluey took around 28 months to build to where it is right? And it's got that softness of [00:33:15] Bluey and it just got totally crowded out back then. So I think we're gonna start seeing new strategies come from premium streaming and I think we're gonna see, new types of narratives. That's what Netflix have constantly had to do. They they had the subscriber narrative. That was great. It was gonna start [00:33:30] getting awkward 'cause they were start- gonna start reaching a ceiling and they needed to have another narrative that went up and to the right. They went to engagement and I think they're feeling the pinch of that now, which is one of the reasons why they're not releasing the engagement report. So I don't know what they're gonna do in terms of how they report it to the [00:33:45] market but I'm looking at it in terms of what they're doing in terms of building kids IP for their own. Not for their own but for their, not that they're building franchises, building kids IP for their own needs if that's one of the things I'm looking at. Marion Ranchet: And so you're [00:34:00] saying, Netflix not where you get to create IP from scratch. It's getting harder and harder on YouTube. The math don't math. You've mentioned that people are building IP somewhere else. Where is that? Where is that [00:34:15] happening? Emily Horgan: The, there are, so public service broadcasters remain a great solid place for folks to take their new shows to because again, you the one thing you have at public service broadcaster is you tend to have that stability and commitment that they will [00:34:30] track the show for 28 months right? It's not gonna be a one series and done. So that's a real that's a real kind of pillar in the landscape. And then but folks are trying, they're trying their to to to get through on YouTube but the key thing about [00:34:45] the key thing about YouTube is Going direct, you're going direct to consumer and a lot of producers, a lot of traditional producers haven't had to do that in the past right? And even though they'll talk about audience, really they've been selling to the commissioners at MIPCOM. That's what and that's even what they'll invest in right? [00:35:00] But they're going direct to consumer and they're going direct with other ideas in mind right? Other monetization ideas in mind. So I just got back from Australia. There's a load of really great Australian YouTubers, Bounce Patrol, Emma Memma, [00:35:15] The Wiggles, La La, who are have have solid and have amazing numbers on YouTube are obviously getting a piece of the pie from that. But the other thing they're doing is live shows right? And that's where they're making their that's where they're making their money. That's where Dan, someone [00:35:30] like Danny Go in the US is obviously big on YouTube has his Netflix deal but has live shows has publishing coming in. There's a few other angles that I see coming in as well where like Certain brands, certain products that wanna go [00:35:45] that are appealing to kids, whether that's a toy product or, like even a food product are going at it the from the, from a content point of view and I think that's smart. So it's not impossible to build a... It's very possible to build a, build an audience on YouTube. It's [00:36:00] very possible. There's a playbook. Yeah. We know how, there's things you can do to... Evan Shapiro: Building a business around that audience is something else. Emily Horgan: Yes, exactly. Evan Shapiro: Yeah. Exactly. But that's the key now. I think if we can, giving people some takeaways, people who are in the who wanna be in the kids' content [00:36:15] business, who are in the kids' content business, some takeaways, I think that's one of the best is YouTube as an audience builder is a great platform. Emily Horgan: Yes. Evan Shapiro: But you then have to turn that audience into some kind of business model that isn't programmatic ad [00:36:30] fill on YouTube because the dollars just aren't. Emily Horgan: Attention is not a business model. Evan Shapiro: Yeah. And live is a good one. Merch is obviously another good one. But what are some others? I love to talk about Toonstar and their mix of human [00:36:45] and AI animation content. So they have a creator-led business but they then animate with AI. They've lowered the cost of production to about 5% of what that show would normally have cost, in the premium [00:37:00] streaming or even in the public media ecosystem and they are profitable on advertising as a result of that. And they've shortened the animation production time dramatically to the point where they can now change the [00:37:15] show based on commentary of the episodes on YouTube. So lowering the overall price, you said this earlier, people at Midcom are ready to make a show if it's $50,000 a minute but everything is not what we do here. Emily Horgan: Yeah. Evan Shapiro: Is that [00:37:30] one of the key takeaways is fucking lower your production costs, shorten your production period? Emily Horgan: Lower your production, costs, definitely. And obviously I think like AI, the Jeffrey Katzenberg essay this week I thought was good. But, and AI is coming and it will [00:37:45] help a production. And that's a good thing. Evan Shapiro: Specifically in animation, it's a unlock. Emily Horgan: The reserve you're hearing in my voice, I was like, just please don't flood the kids market with really rubbish [00:38:00] like non-thought-through. Oh my God, Pixart. I'm gonna I'm gonna name and shame. I'm getting this ad on my TikTok FYP, which is like, "This is a side hustle for a side hustle. Just, go copy the text of this YouTube video, fit it into Pixart and now you're making millions on YouTube." And I'm [00:38:15] like, "Eh, not on an MFK, girl but whatever." You know what I mean? But it's just yes to AI, yes to ethical human-led AI support to production to lower costs. But my [00:38:30] reservation is we are already seeing the flood of AI Evan Shapiro: Slop yeah... Emily Horgan: Hitting animation in a major way and that's why I can't rejoice 100% in what you're suggesting. Because it's just, you can't have one without the other, unfortunately. We can't have nice things. [00:38:45] Evan Shapiro: The idea that AI slop is gonna turn into the next Bluey, kinda probably unlikely right? Whereas, when you see the people who are using AI ethically and there are lots of them, especially in animation, they're green lighting shows that [00:39:00] wouldn't get green lit otherwise because the production costs are way lower and so the writers and actors and directors all get work they wouldn't have gotten. On one hand. And I think that the proliferation of AI slop will make high quality IP [00:39:15] that much more valuable. But at the center of everything, it has to be a good story, it has to be good characters, it has to be good content. Emily Horgan: It has to be human-led as well. Maybe that's another do, another on the do list for YouTube right? And I know they're moving around trying to [00:39:30] create AI takedown tools and this kind of thing but like that is one of the major weaknesses of their platform is that UGC, like people can just hose pipe it with slop. And then good stuff [00:39:45] cutting through is more difficult and that erodes trust of parents. And I think obviously today's parents, Gen Z parents have grown up in the, in the internet so they there there's, they're already coming to it with maybe less trust than generation before.[00:40:00] Marion Ranchet: And how about subscription businesses, huh? Because we're, we've talked about YouTube and so making money from advertising, branded content, the flywheel that is typical to kids' IP with merch, books, et cetera, which [00:40:15] ToonStar does, actually. They had a book right? When we had them on the show, they were working on putting a book out. How about subscription businesses? You and I, we wrote a piece that was a couple of years ago mini SVODs. 'Cause if we're saying that [00:40:30] Millennial and Gen Z parents are very wary about what they're putting their kids in front, one might argue that there's, if Netflix doesn't wanna be that place, there's room perhaps for is it single IP or is it a, a pure kids [00:40:45] player who could be that stop shop that membership ecosystem where both kids and parents feel good and safe? Emily Horgan: Yeah I think there's an opportunity there. What I would say is, Netflix are definitely in the business of they are in the business of kids if they're not in the business of building [00:41:00] kids. They will continue to leverage that and so will Disney. But where the real... And there's a few mini kid specific streamers that are aggregators and I think that's interesting but it's been difficult for any of them to reach scale although there's some new ones popping up [00:41:15] more recently. But that idea that we wrote about of brand-driven subscription service, I think has a lot of has a lot of potential. Kids are such avid fans when they're in their fandom right? Anyone who's had a who's had a preschooler go through [00:41:30] whatever, like whatever phase. They go through go through a Bing phase, they go through a Mickey Mouse phase, they'll go through a Bluey phase. Like when they're in that moment, that character is so close to them. So I think there is an oppor- some opportunity [00:41:45] there and we tracked a few, at that stage who were, doing that and continue to do that. It's just, it's trying to get parents to sign up. Parents are busy. Parents are frazzled. It's that that is the biggest challenge. Evan Shapiro: And they also all have like 12 subscriptions that we're dealing with [00:42:00] too. Subscription fatigue is really a, a major issue in across all media, not just streaming, Emily Horgan: I'm coming to the end of a piece of research, actually that I'll share with you guys in a few weeks that looks at [00:42:15] why parents subscribe to platforms and a lot of it is just do they have something for everybody? If they and so they are looking for more so those broad offerings. But that's not to say where when a kid is a fan of something passionately, [00:42:30] it's a gift to a parent to allow them to go deeper in it right? And particularly if it's relatively inexpensive on a monthly basis. Evan Shapiro: And does that kinda lead to what, and this is something I'm hyper-focused on which is, the kind of all platform, all [00:42:45] things, all merch, all experiences subscription, where not only do you get the show and the IP but you get regular delivery of merch, you get opportunities to see the show live, you get all these extras that a kid, that a [00:43:00] true, fan when they're a kid absolutely wants. Emily Horgan: Yeah. I think that has to be an opportunity. And I think some of the changes that even YouTube are making around shop and community and stuff like that could move to support that. [00:43:15] it's those money can't buy opportunities where you know and listen it's not, meeting the character can be a challenge but whether it's cameos or whatever right? It's this type of thing that I think can really add the value [00:43:30] because when kids are like, when kids are fans of something they are just so deep and so passionate and the joy it brings them, the happiness it brings them is, for the, for their parents is, kind of secondhand joy as well so they just wanna try to allow them to [00:43:45] continue to experience it experience that. So there there there has to be opportunity there for sure. But I'd have one question for you guys before we wrap up. What do you think the kids industry needs to be doing to help itself? Marion Ranchet: So I'll go, 'cause we've talked about public service media and I'm [00:44:00] afraid to say that they're not always gonna be there to keep commissioning content when the others are pulling out right? You've seen it the budgets are being lower so their model is being challenged. So I would say my number one advice to anyone [00:44:15] in your ecosystem is to just stop thinking commission first and be a bit more kind of test and learn. The, you've said it, there's a lot of platforms where you can actually play, iterate, test stuff. It's in your hand, just go [00:44:30] do it right? During one of my event a few weeks back, we were talking about someone who tested a brand-new format on YouTube and then managed to take it to a commission. Awesome. So I would say big change of mindset in the [00:44:45] order of business. It's been too much like okay this is the royal way. Whereas now I'm afraid that there's, many other ways and that you have to try it out right? The door, the window and the whole thing. That would be my thing. [00:45:00] Evan Shapiro: I think that's 100% right. If you're not developing direct with the consumer base, it's gonna be almost impossible for you to prove out the IP's viability long term at this point. So and the best [00:45:15] way to get the commissioners interested is to build a decent audience. So build the audience first and then the model should usually come after that. I think when you look at the two ends of the spectrum that I recently compared so ToonStar [00:45:30] and Steven and Parker, which is human, AI animation mixed direct to consumer, now has, somewhere around 30 million people who watch it per week in six different languages. That's a [00:45:45] great example of greenlighting yourself, keeping the costs at a level that you can afford to greenlight yourself. But then on the other end of the spectrum is Sesame Street and the way that they've managed to window their product between Netflix and YouTube [00:46:00] and everything else that they're doing. They reshaped the show into an 11-minute episode. I think that the unifying factor here is radical entrepreneurism. Marion Ranchet: Yeah. Evan Shapiro: At the heart of kids' content. I would say all content but especially kids' [00:46:15] content. If you're not prepared to be the entrepreneur of this IP, then don't do it, 'cause there's no way that just making a show because it's good is gonna be the thing that answers. It's unfortunate, but that is the nature of the beast. So I think [00:46:30] start from a, I'm gonna start a business around this IP as opposed to, "Hey, I really like this character. Let's make a show." Emily Horgan: Yeah. Agreed. Yeah. Yeah. It's kinda it's kinda creatorism as well as entrepreneurism. Evan Shapiro: Very much creatorism. Look, you said this at the very beginning. Ms. [00:46:45] Rachel, like all these creators, they're the ones who are successful because they've been swinging two bats for so long that once they get any kind of green shoots, it's just off to the races. And I think the creator mindset is going to be the thing [00:47:00] that makes content work, kids and otherwise. And Bluey and BBC Studios is a great example of that. They took this tiny little thing and turned it into a monster hit because they thought from a creator standpoint. [00:47:15] Marion Ranchet: Awesome having you with you us. I think we could stay forever but let's make it something a bit more regular. Evan Shapiro: A regular thing. Marion Ranchet: Yeah. But Emily, your engagement reports, where can they be found? Emily Horgan: Yeah you can find me, Emily Horgan [00:47:30] on LinkedIn, the Kids Streamer Sphere on Substack or ehorgmedia.com. But drop me a line at emily@ehorgmedia if you wanna discuss coming on board with the reports because yeah we're really proud of them. We've got some great clients across streaming [00:47:45] major toy companies, major licensing companies. And our clients have been with us for two years now so we know that the value of the insights is really there. So yeah, drop me a line. Marion Ranchet: Awesome. And And so you guys are gonna be at MIPCOM, MIP [00:48:00] Junior together. What are you cooking, Emily? Are you the one curating the whole thing? Emily Horgan: Not quite. I've got a few great sessions. So I've got the State of Kids and Teen Industries on Saturday with YouTube, the BBC, Pocket Watch, Spawn Point [00:48:15] Media, who's a creator studio and Cottonwood, who's more of a traditional studio. And then I'm speaking with Greg Dre at from Animagem Lumi. Marion Ranchet: Oh nice... Emily Horgan: On on Saturday. And then on Sunday, I'm chatting, I'm going back into my old alma mater. [00:48:30] I'm moderating the Disney panel. I'm getting to go back in and ask all the questions that I've had since I've left there. So that's a really fun one I'm looking forward to. Evan Shapiro: Yeah and then I'm closing out the whole thing. I have to follow all that. And I'm, rather than focusing on [00:48:45] what's wrong in the industry, I'm gonna focus on a number of case studies, including Bluey, including Sesame Street, including Stephen and Parker, of what's going right now and then I'm gonna end on how we fix what's broken. Marion Ranchet: This was [00:49:00] the Media Odyssey podcast with Emily Horgan. Evan Shapiro: And that is Marion Ranchet. Marion Ranchet: And that was Evan Shapiro. We'll see you next time guys. Evan Shapiro: Take it [00:49:15] easy.