Kids are using tablets in their tens of millions. This we know. New children’s brands are emerging from apps, YouTube and other digital platforms. This we know too. But what does it mean for the companies already in the children’s entertainment space, and the startups hoping to disrupt it?
Someone with a few ideas is Dylan Collins, CEO of UK firm SuperAwesome, with a background in the games industry (“I am about 12 different types of nerd!”) working on technology for online multiplayer games, then social games, and then digital games distribution. “Today, videogames are the biggest entertainment category on the planet, if you believe what the analysts are saying,” he said, noting Grand Theft Auto V’s billion-dollar revenues in its first few days on sale last month.
SuperAwesome works with children’s brands in the UK, helping them market their products, from big brands to tiny startups. And Collins has a broad view of trends in children’s entertainment from his other role as investor and advisor to various content and technology firms. He shared some of that data this morning.
His key point: change. Kids still listen to music, but they’re more likely to be streaming it from YouTube than buying it. They still watch television, but they’re more likely to be watching it on Netflix or, yes, YouTube. “This year there is approximately 100 hours of video being uploaded to YouTube every minute,” he said. “This is the world our kids live in today.”
He also suggested that rather than talking about “second screen” habits, for kids there are now four important screens: mobile, TV, desktop and laptop – and maybe five if you separate out smartphones and tablets. SuperAwesome recently asked 2,000 children what presents they’d like to unwrap on Christmas Day. iPhone and iPad dominated, rather than traditional games consoles or handhelds.
“When you’re thinking about creating new IPs and new brands, build them for tablet,” he said. And not necessarily just iPad: “Statistically kids who have their own tablets will have an Android tablet.”
Collins also said that creating new IP for this world must involve thinking of how that content will be discovered right from the start. And that’s increasingly less about physical retail presence for toys and products. “More and more you’ve got to think about discovery in equal part as you design your new brands and new IP,” he said.
But creation has to be integral to this new IP too. Collins talked about an Irish 13 year-old called Jordan Casey, who’s been making and releasing games for iOS. “We’re living in an age where kids can teach themselves how to build their own content for themselves and their friends, and they’re doing it more and more,” he said.
Crafting game Minecraft is also a big sign of this: it generated around $240m in 2012, and children were a huge part of that. “The next Mark Zuckerberg is going to be 14 or 15 or 16,” said Collins. “As content creators we need to think about this trend, and make sure we’re giving kids the opportunity to shape content for you or with you.”
Collins also talked about the importance of video. “Anything we see that interacts with kids aged 6-16 across our network involves video,” he said. “You need to think about video, video isn’t going away… Online video is going to get bigger and bigger and bigger. You need to think about this from day one.”
But he also warned that building new IP has to involve making lots of mistakes – and fostering a corporate culture where that’s fine, and encouraged. Something that doesn’t always come easily to the TV industry.
“We have a failure quota within SuperAwesome, where there’s a number of mistakes we try and get to every week!” said Collins, citing digital-first brands like Angry Birds, Cut the Rope, Talking Friends and Moshi Monsters as examples of brands that became big only because the teams behind them had the freedom to try, fail and try again. Lots. “Make failure part of the process. It’s absolutely critical.”
And he returned to the importance of YouTube as a key channel for building new brands. “YouTube could probably kill half a dozen entertainment companies tomorrow, just because of how many children are there,” said Collins.
What about those big, global children’s entertainment companies: the Disneys and Viacoms of the world. Can they build digital-first brands, or will they have to buy them? “Normally I would say its very very difficult. That said, you’ve got examples like Skylanders, which came out of Activision, which frankly nobody would have predicted, and Disney Infinity,” said Collins.
“I’m surprised there hasn’t been more IP acquisition by the big companies. You see Spinmaster picking up companies, Hasbro picking up companies. I think that trend is going to continue. Successful IP creation is not easy to do, even on a good day. Acquisition will be the norm, but there will be the odd internal success.”