Netflix is investing even more in kids-focused content after coming off of two Oscar nominations for animated films

Coming off of two Oscars nominations for its animated films, Netflix is investing even more in the kids-focused content, per CNBC. The company’s chief content officer Ted Sarandos spoke of upcoming animated films to come over the course of 2020 as the streaming giant looks to not only capture new audiences but to continue delighting its existing 167 million global subscribers. 

Business Insider Intelligence

With further investment in kids content, Netflix is likely attempting to water down a major strength of its new-to-market rival Disney+. 

Disney’s new streaming service — which launched in November and has 28.6 million subscribers, per company statements — boasts a deep catalog of kids content, ranging from classic movies to new series. For its part, Netflix has signed licensing or coproduction deals with DreamWorks and Disney itself, and more recently with Japanese animation house Studio Ghibli and Nickelodeon.

Netflix also tapped former Disney heavyweight Glen Keane to create animated kids content, who worked on some golden era Disney titles like “The Little Mermaid,” “Pocahontas,” and “Aladdin.” But its brand reputation for kids content remains a major advantage Disney has over Netfix. More broadly, kids content itself  is likely a powerful driver of subscriptions and attention in its own right: As BII senior research analyst Audrey Schomer argued in a recent report, kids content is often thought of as high-retention because kids have strong viewing preferences that parents often wish to fulfill. 

Greater investment in kids content from Netflix — along with the existence of Disney+ — could cause even more young viewers to migrate away from ad-supported environments. A significant number of young people in the US have abandoned pay-TV: From 2011 to 2019, traditional TV usage plummeted by nearly 50% among kids ages 2-11 and 65% among teens ages 12-17, per our analysis of Nielsen data.

That means kids channels, like Nickelodeon or the Disney Channel, might be increasingly less reliable for marketers looking to reach young people. And in some cases — as with Disney — the content owner is migrating its content behind the paywall of an SVOD service. With Netflix pouring more money into kids content — along with new entrants planning to do the same, like HBO Max — the rate at which young viewers are moving to ad-free environments might only speed up.

That being said, marketers are not without options when it comes to reaching young people via video. Roku has a “Kids and Family” section, NBCU’s forthcoming service Peacock will feature movies made in partnership with DreamWorks and has announced kids content, and ViacomCBS forthcoming streaming service — set to have an ad-supported tier — will include IP from channels like Nickelodeon.

And for its part, YouTube has emerged as a wildly popular platform among young people — although reaching young people on its platform is not without its own issues given its run-ins with Children’s Online Privacy Protection Act (COPPA), which prohibits data collection on those under the age of 13. So, while marketers still have options when it comes to reaching young viewers, things may be growing even more difficult.

Brands will have to bear these changing dynamics in mind as they allocate a significant amount of money toward reaching younger audiences: Advertisers are expected to spend $1.7 billion on campaigns targeted towards kids by 2021, per PwC estimates.

Want to read more stories like this one? Here’s how:

  1. Check to see if you already have access to Business Insider Intelligence through your company, or inquire about access if you don’t. >> Check If You Have Enterprise Access
  2. Explore related topics in more depth. >> Visit Our Report Store
  3. Current subscribers can log in to read the briefing here.

Powered by WPeMatico