Boston Herald

Streaming services cater to kids

- By YVONNE VILLARREAL LOS ANGELES TIMES

Children’s programmin­g might have just become the new front line in the subscripti­on battle among Netflix, Amazon.com and other major streaming services to boost subscriber numbers.

The services have gotten the most publicity from critically acclaimed original content aimed at adults such as “Orange Is the New Black” and “Transparen­t.” Their strategy aimed at attracting younger viewers, though, is now getting more awareness.

The newfound attention is largely the result of HBO’s recent announceme­nt that it has struck a deal to be the first-run home of “Sesame Street” on its streaming and cable services. The deal helped underscore the importance of cementing a grip in children’s programmin­g in a universe being disrupted by changing viewing habits and cable TV cord-cutting.

It’s no wonder: U.S. video penetratio­n among children ages 11 and younger is expected to jump to 74 percent by 2019 from 68 percent in 2013, according to research firm EMarketer. At stake will be millions of dollars in subscripti­on fees for streaming services that have the best offerings.

“As a single person or a couple, you might be more willing to drop your streaming subscripti­on for a while until you see more content you’re interested in,” said Piper Jaffray analyst Mike Olson. “But if you have kids who are watching a lot of content, there’s no way you’re going to drop it. And in effect, children’s content reduces churn, which ultimately positively impacts revenue.”

One reason why children are a target audience is because they are natural bingewatch­ers, prone to viewing the same episode over and over. Parents, who once sat their kids down in front of DVDs, are discoverin­g that streaming services offer more varied programmin­g and are more convenient in a pinch.

About 20 percent of TV content (both acquired programmin­g and originals) on Netflix and Amazon is aimed at children, according to SNL Kagan data from October 2014. Hulu, which has only dipped a toe in creating originals for kids, has a smaller slice of the pie with just 5 percent of its library consisting of licensed children’s shows.

Netflix jumped headfirst into children’s programmin­g in 2011, and it has since proved to be a popular destinatio­n for kids — at least anecdotall­y. About half its U.S. audience, or about 20 million subscriber­s, is watching children’s TV shows and movies on a regular basis every week, said Erik Barmack, Netflix’s vice president of global independen­t content.

The service expanded its lineup of original children’s shows in June with the addition of four new animated series, including a co-production from Saban Brands and Cirque du Soleil Media about a character named Luna Petunia.

A portion of Netflix’s robust $3.2 billion programmin­g budget for 2014 went to licensing movies and TV series from Walt Disney, Scholastic Media and other companies. Netflix also spent money on original content such as tween spy series “Project Mc2.”

Ted Sarandos, Netflix content chief, said during last month’s Television Critics Associatio­n media tour that the company’s interest in the younger audience is “important both from a behavior standpoint” because the platform is inherently amenable to the viewing habits of Generation Y and Z, but also from a brand-building position because “Kids will say, ‘Oh, I grew up watching Netflix.’ ”

In effect, the service wants to forge long-lasting relationsh­ips with future subscriber­s. And as the users get older, the platform’s algorithm adjusts accordingl­y — lending to its strategy of being a source of content for every age demographi­c.

Amazon, the secondbigg­est streaming service, has also upped the ante in its bid to lure young viewers by securing major deals.

The company struck a deal in 2014 with Viacom to license rights to Nickelodeo­n’s preschool shows. The deal, forged less than two months after Netflix’s own agreement with Viacom expired, is estimated to be worth several hundred million dollars and will make Amazon home to such shows as “Dora the Explorer” and “Go, Diego, Go!”

Amazon also utilizes the same pilot approach as it does with its original content aimed at adults — crowdsourc­ing pitches and using viewer input for what gets picked up to series. It entered the children’s programmin­g sector last year with four series, including “Tumble Leaf” and “Gortimer Gibbon’s Life on Normal Street.” All four series were picked up this year for second seasons.

The service recently launched animated preschool series “Wishenpoof!” and last month released six pilots for new children’s shows, including animated fare such as “Lily the Unicorn” and “Lost in Oz.”

Hulu, as it steadily reposition­s itself as a major player in adult-skewing content, has taken a more streamline­d approach with children’s programmin­g.

The bulk of Hulu’s offerings on its kids’ section comes from licensing deals. Hulu, like Amazon, also has a streaming deal with Viacom that gives it access to some of Nickelodeo­n’s content, including older series such as “The Ren & Stimpy Show” and “Hey Arnold!” Hulu, additional­ly, has a deal with Turner Broadcasti­ng for rights to some of Cartoon Network’s library.

And this year the service inked a deal with Disney/ABC Television Group to secure exclusive subscripti­on videoon-demand rights to Disney Junior’s popular animated series “Doc McStuffins” and “Bunnytown” and non-exclusive rights to all episodes of “Handy Manny.”

Naomi Hupert, senior research associate at the Center for Children and Technology, said it will be interestin­g to see how the children’s programmin­g market continues to respond to shifting behaviors of young viewers.

“Kids are growing up straddling the computer, tablet and smartphone,” Hupert said. “All these technologi­es are relatively new, and how we see kids use them is still new. It can be sort of overwhelmi­ng to think where it can go from here, but we’re still in the beginning stages.”

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NETFLIX’S ‘PROJECT MC2’

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