Like Netflix for kids, but different

Start-up kids VODs can't compete with the likes of Amazon when it comes to money, the amount of content available on YouTube, or the subscriber base of Netflix. So how do they stand out?
August 21, 2014

When Mike Lowe first described his Calgary, Canada-based start-up Kidoodle.TV, one comparison made it easy to explain. “It’s a Netflix for kids,” he says. The SVOD app commercially launched on Jan. 1 with a monthly fee of US$5, offering a platform for kids 12 and under to watch TV shows, while parents can be comforted knowing the content is age appropriate.

Describing a platform as Netflix for kids, however, also brings attention to the very SVOD giant that is ramping up its children’s content alongside the likes of Amazon and YouTube. The TV set is no longer the sole source for children to find their favorite TV shows.

“Everyone is waking up to the fact that they have to find a new way of engaging with this generation of kids with online content,” says Dylan Collins CEO of London-based SuperAwesome, a children’s marketing and research network. “Where there’s disruption, you will always find new start-ups jumping in.” And there is no shortage of entrants.

Some are narrowing their age demographic and app features. A couple former Nickelodeon vets launched batteryPOP last November, a free online network targeting children six to 11. Viddiverse is a video social network for tweens. PlayKids is an app that features educational games and videos targeting preschoolers, while HopsterTV targets preschoolers with on-demand shows.

Toon Goggles, meanwhile, aims to hit a wider audience with an on-demand platform for ages 12 and under. “We’re tailored to children, but we don’t have horses spinning around on merry-go-rounds,” says Stephen Hodge, the company’s managing director. “It’s like any other VOD service, but the colors are a little bit brighter.” The app also offers multiple entertainment options, including shows, games, books and music with the recent release of Tune Goggles. “It’s like Pandora for kids,” Hodge adds.

Standing out to kids, parents and content creators isn’t easy for these start-ups . None have the financial backbone of an Amazon, the sheer amount of video content like YouTube, or the subscriber base of Netflix. But all is not lost.

“The advantage that these start-ups have over the bigger guys is they can focus exclusively on the challenge of getting good kids content and building awareness with parents,” Collins says. “When you’re Amazon, YouTube or Netflix, internally you’re dealing with a whole bunch of different objectives—and one which is the kids space.”

What would help set these start-ups apart from larger players is insuring there are strong parental controls, good programming and a friendly interface.

KidoodleTV has taken a particular focus on creating parental controls that allow parents to turn off the app at a set time, deselect any shows they deem inappropriate and set time limits for how long a child can watch. “We don’t want kids watching Kidoodle five hours a day,” Lowe says. “Moderation is key for our kids.” Kidoodle also tries to differentiate itself by not relying on any venture capital funding. Instead, Lowe says the company raised nearly US$10 million through angel funding. “We have to be different from a brand perspective,” he says.

While raising capital is one objective, another barrier for an SVOD is finding parents willing to add another line item to their monthly credit card statement. After all, many shows are available online for free. If these start-ups want to offer children’s content for free, they must then handle the delicate issue of advertising to children.

To find a middle ground, Toon Goggles offers both options. If parents want a commercial-free experience for their child, ads can be turned off via the US$5 monthly subscription. Alternately, kids can access the content for free, with some advertising. “That’s how we keep the lights on,” Hodge says.

Another obvious way to stand out from competitors is to offer shows no one else can. UK-based Hopster, which focuses on kids age two to six, signed a UK exclusive with Magic Light Pictures for the TV specials The Gruffalo and The Gruffalo’s Child. “In the streaming media world—or any kind of media that’s based on content—it is the exclusives that will win it out,” says Collins.

That’s not to say these start-ups must engage in bidding wars for content with the online giants. It’d be virtually impossible for these smaller SVODs to outbid Netflix for 300 hours of original content from DreamWorks Animation, or have a content and merchandising deal like Amazon does with Hit Entertainment for Fireman Sam in the US. Fortunately, there’s no shortage of content looking for a home.

“The fact that there’s content on Toon Goggles that you don’t see on Disney, Netflix, Amazon, Cartoon Network or Nickelodeon, we see that as an advantage for us,” Hodge says. “It sets us apart from them.”

Gormiti may not have been a ratings giant for Cartoon Network in the US, for example, but Hodge says the show is among the best performers on Toon Goggles. To get kids watching, however, shows must catch their eye without the luxury of Dora the Explorer or SpongeBob SquarePants’s brand awareness. “We have content that’s not immediately recognizable,” Hodge says. “So we have to curate our content so that the images are at least appealing enough for the child to say, ‘Let me see what this is.’”

Now that the start-ups are collecting data, they can also tailor the platforms specifically for Generation Z. Kidoodle has seen a huge demand for edutainment properties thus far, according to Lowe. Hodge says Toon Goggles’ viewers on mobile devices lean towards short-form content, while those watching via smart TVs often select shows that are the standard 22 minutes in length.

“Where these guys have interesting opportunity is they can deal much more nimbly with a lot of the indie content creators and indie production studios,” Collins says. “They might be able to find the next Peppa Pig or the next Fireman Sam. That could change the game.”

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