Making Sense of Sensical, a New Digital Video Hub for Kids

just for children with the brand name Sensical. Leading this venture is the CEO of common Sense Networks, Eric Burger, who joins me today to help make sense of Sensical the first award from our sponsors. Welcome back to strictly Business where we're talking with Eric Burger, CEO of common

Sense Networks. Hey, aren't good to talk to you. As always, you and I go back to your days at Sony Pictures, where you were a real pioneer in the streaming space, leading the way on one of the earliest brands to make a go at premium streaming entertainment at Crackle. So no doubt this sets you up nicely for this new gig.

Oh it does. There's just tremendous learnings from from doing that. Obviously, I'm a believer in AD supported, and I think there's a place for services like that in everyone's personal bundle, and you see that playing out very much so in the market today. But also there's great lessons around psychographics.

You know, everyone gets very focused on demographics in an ad world, and that makes sense, but just understanding specifically what people are looking for, what their motivations are, with their beliefs are, is critical, and that's a big part of the opportunity I saw here. There is a shift in consumption that's happening, as I saw when I was at Sony, the shift to to streaming UM into the living room. Uh, but the shift and consumption for kids

is profound, uh, and it's very different. My kids are a little bit older now, but they've moved to open user generated platforms that are not specifically designed for kids, and eight of them are spending an hour a day on these on these services where the content is not necessarily appropriate for their age, the advertising is not appropriate, it's algorithm driven, and you know, parents are overwhelmed with what to do about this, and you know, I think

this is another opportunity in a place to step in. So talk a bit more about what the play is here. What sensicle is what content it brings to the table. Yeah, so we've borrowed you mentioned common Sense Media and they've been evaluating content for almost two decades and we've borrowed and adapted their ratings intellectual property that's based on age appropriateness and child development stages, and we've put that and applied that to short form video, digital first video, some

studio video as well. And UM created this industrial process for rating and curating content, and we're out there rating and curating a lot of content that is in line with where kids are today. It gives them another opportunity to watch the content that they want to watch in a type of environment that they're used to. But it's all UM safe. It's beyond safe. It's healthy, it's got learning attributes for it so parents can feel confident, and it's free and accessible. So it's an about services on

all devices. Will have fifty plus topic based channels, will have three live channels, and will have an opportunity for kids and parents to favorite things and make their own channel. And as far as the I P itself, are these gonna be titles that kids are familiar with? Is there any original content it's very familiar with. So it's a

combination of digital first content and studio content. You know, on the studios we have people like Sesame Workshop and Albana and nine Story and Jim Henson and Tell Thomas and Barbie Vlog and very familiar brands that kids and families are used to UM but are but meet our criteria obviously UM. But then we also have many, many digital first creators and some of them are very big. The kids know Pink Thong, super Simple Songs, Mother Boost, Club,

Bounce Patrol. But some of them are these hidden gems that aren't caught up in the algorithms of some of these services, and we've found them. But all told, I think, uh, it's over about three billion views last month of the creators whom we've licensed, so there's a lot of activity there. The key is to know what's the good stuff. You know, parents just don't have the tools or the wherewithal to find out or separate what is healthy and what is

not healthy from a content perspective. So we've done that. So to answer your question, in the first instance, it's all licensed content that we're ingesting more system and publishing UM and over time as we learn more about the data, what's working. Is it science for nine year old? Is it sports for six year olds? We'll have the tools and the information to use more original programs. Back up for me if you will. I'm curious what it was like when Common Sense came to you, because they're not

obviously known in the video streaming space. There are not for profit and here you are leading a profit for profit extension. So what was their pitch to you? The pitch was that there parents had been coming to them. You know, many ten million people a month they use this. They're six of schools with their Digital Citizenship curriculum. They have a reach through all of these devices and partnerships like Apple, Sky and the Comcast two million people a month.

And their pitch was their parents are coming to them and saying what about short form, what about these open platforms? What can we do about this? And that there was a way to activate this very passionate base towards this other media. And you know, they have been looking at this issue for years and looking at models like nat GEO or Smithsonian that had put for profit media extensions in front of a nonprofit that approved value back to

the nonprofit but are you know, independent media organizations. And I just again, I had seen this opportunity in this progression of kids moving to these platforms over time, But how do you start How do you start a service in one I mean, with what's going on in the world. You need to have the brand permission, you need to have a built up audience base, and you need to have something unique in terms of the i P. The i P being the ratings and the child development guidelines.

And that's what I saw. That was a pitch, That's what I saw in the opportunity. And I totally get what you're saying in terms of the opportunity to attract kids, but the reality is as far as I could see, and and look, there's other ventures out there that target kids with you know, kids only streaming services, but the overwhelming majority of the viewing is already happening on the big platforms where they may not be well served by

the algorithms or whatnot, but they're there. So is the central challenge for sensical sort of carving out a place on people's iPhones and iPads to watch in a different app than they usually do. It is and and in the living room by the way rights it is, and I think you just alluded to this. It's apparent play. Initially, the customer acquisitions the parents. The retention is the kids.

The kids this once they get there. But you have you know, we've done study after study after study common sense and and for this offering, and of parents say they're frustrated with what's available to them. Um, they just don't have the tools and the wherewithal to do something else. They want what's better for their kids, and they want educational values in the content that they're watching. They want

to see role models. Um, they want learning based content based on topics of interest to their kids, and they just want to know that it's safe and backed by a third party. It comes back over and over again in every study we do. So the key is to leverage the audience that we have, leverage the brand that we have, and to put something in front of parents and give them the tools, uh to to let them

have the experience that they're asking for. One of those tools is the parent zone aspect of what you're doing, which is describe how this you know, I think really speaks to what is core to the sensical pitch, which is making parents feel safe it's pretty amazing. Actually, we you know every UM I mentioned this industrial process. So we have a person watch and rate and tag every video of every show, and there's hundreds of right area that go into it, and the criteria are learning attributes

like math and science and making and moving UM. But there's also social and emotional criteria that go into it, like compassion and curiosity and perseverance, and then there's hundreds of topics that go into this as well. So we have all of that metadata tagged in the content, and we combine that with the consumption of what the kids are watching and generate these learning reports for parents in the parents zone, so they know and they can look

at it two weeks. They know, this is the videos that my child watched along the learning scales math, science, making, moving, but this is also what they watched in terms of topics like did you know your child spent three percent of their time watching dinosaurs or watching sports or watching cooking UM. And so they get this way to not only know what their kids are learning on the service, but to engage with them further, to extend the conversation

and the learning experience with them. And it's a very differentiated there's nothing like that. Yeah, I mean it almost sounds like you're describing a curriculum with an aspect that is like a parent teacher conference telling us what our kid is absorbing exactly. Yeah, no, that's exactly exactly right. And and um, and you can go as deeper, not deep, as you want to these reports. You can dip in, you can dip out. Um, they're there. They have a seven day look back or a thirty day look back

at what your child is watching. And again it's not too we have time limits, of course, but this isn't about um, you know, monitoring or cramping down on screen time. This is a little bit about embracing what your kids are learning from this. And that's one of the big differentiations. It's not just safe the content. We say healthy in that there are learning attributes and a learning promise here and and that's great for parents to take advantage of

those twos. But what's interesting about your pitches, Unlike just about every other streaming service out there, you're sort of proudly not algorithm driven. When you know, streaming, we're told is all about the algorithms and driving you zeros to get more and more engaged so how do you reconcile that. I know it is um. It is handcrafted and put together and it needs to to give that right experience. But we put a lot of thought into these programmed channels.

I mentioned there's fifty channels on the service and that will just continue to grow, and those are based on these topics and passion areas. So, um, you know the problem on the algorithm services as they go down the rabbit hole, and oftentimes that rabbit hole doesn't end well. And this we say is the safe rabbit hole. So if you like live action and how to content like sports or drawing or dance or cooking or d a

y or building, you know that's there for you. Um. But if you're passionate about dinosaurs or animals or video games or out of space like those are there for you too, again thoughtfully programmed. But then the fundamentals of preschool are also there, so the reading, the math, the science, the history, music, making moving, positive messages and role models. Those playlists are there and again laid in in a way that kids can go down that that rabbit hole,

but in a safe way. It's just not an Albert, It's it's a known quantity of what's going to come next. Well, another a word that comes up when you're talking about the safety factor and kids is the advertising, which, hey, it's great that you're a free service, but don't parents get a little skittish about any kind of advertising and how are you keeping that part safe? Yeah, and you can imagine this was a really hot topic for common sense media that has a lot of thoughts on what's

going on with advertising for kids in the world. But um, we spent a lot of time developing best practices here and adapting a lot of the practices from television that just don't exist in digital. So there are things like, first of all, vetting the advertisement just like we've got all the content, to make sure that it's age appropriate for each of the different segments of the service. UM. And there's rules like frequency caps and the volume of ads within a pod and the distance between the pod.

But the big things are category exclusions. You know, there's no sugary foods and drains, there's no fast foods, there's no theme parts UM. And the other two things that are really important are the separation of content from the advertising. This is one of the biggest things that you don't see in digital m that you've seen on TV for a while. So it's both separation in terms of we are now moving to an ad break and making that really clear for kids because they can't distinguish, but also

not doing content blending advertising blended into the content. These levels of consumerism are very prevalent in digital media today, where the host is pushing the ad or doing unboxing videos and for a kid, they can't distinguish, and it has some really poor role model and character traits that come out of um that type of content that we've completely avoided on both the licensing side and the way

that we're doing You mentioned ad breaks. It's also a good reminder that, and this is very sort of sensical, that it's not just an on demand platform that there are linear streams. I mean, is that kind of like essential for any streaming launch these days? It seems like it is. Yeah, But the but the consumer, you know, it's it's funny because what's old is new, sumers are are eating it up. There's times where you just want to lean back experience, and that's true for kids and

that's true for parents. And so we put together three live channels, one for each of our key age segments. So we do preschool kids two to four, um, we call little Kids five to seven and then big Kids eight to ten, and each one is programmed with day parts to start your day, midday learning activity, movement in the afternoon, the flying down at story time at the end of the day. So pretty thoughtfully programmed into days.

We're gonna take a quick break, but we'll be right back with more from Eric Berger, and we're back with Eric Burger, CEO of common Sense Networks. Now, you mentioned earlier, of course that Sensical is available both on mobile platforms and in living room. Talk about the distribution strategy here. I know you've got it. Seems just about every major

platform lined up to get the app on there. What has that been like, because we've certainly seen headlines over the years of it how fraught that could be, and also the discovery challenge because it's sort of like, hey, it's great to be an app on a platform, but or is it's sort of like a grain of sand on the beach. Yeah, you know, this is one of the big lessons from from my from my last gig.

You know, we spent years working on building up the distribution and wanted to be on all the platforms and understood, particularly with an AD supported service, you want to be as probably distributed as you can be. And that was one of the first things when I came over is getting back in touch with everybody at all these devices that I had known and the team had known, and ensuring that we were on the key platforms that matter.

And the living room does matter, even for kids, and you'll see some of these big platforms are now getting an overwhelming amount of their consumption, even the short form user generated platforms are getting an overwhelming amount of consumption in the living and so it was important from my perspective for us to be there very early. The discovery is about having a great product, you know, making that known to the distribution platforms and ensuring that um, you know,

you get featured. I think we have a standout product. The feedback that we're getting from these platforms is there's nothing really like it in terms of its mix of entertainment and learning and parent tools, and you know, we believe that we'll get the features that we need there. And then of course it's about activating the base that we have through common sense. I mean, there are other child centric streaming brands out there. Doodle comes to mind.

They've been out there a while. But I'm wondering whether you if you see your competition as really the brands that are getting all the attention in the streaming space right now subscription driven, not kid focused, but certainly kid catering uh, services like Disney plus Netflix of course, I mean, are they your rivals. I think it's a no. I

think we're a compliment to those. I think kids are using services like YouTube and TikTok the same way adults to, which is they go to the large subscription streaming services. Some of them still go to linear TV, but then they use these other platforms to fill in with different type of content, shorter form content, how to content, live action and animation in a mix. And that's what's happening now.

If you look at the way kids are broken down, they spend I don't know about thirteen to fifteen hours per month on these online platforms meaning um uh you know, YouTube and TikTok and those types of services. But that's separate from their streaming time on those subscription services you mentioned busy otherwise, and that's separate from their live TV. So I think it's more of a compliment the smaller players that are emerging, you know, that's less of the concern.

I think they're a little more niche and not really taking on the UM the breadth of the content that

we're offering, with the learning aspects of we're offering. And definitely, while they may be UM safe, I don't think they're providing this healthy content experience where you've got child development experts watching every video within the service, but must eventually for the growth of your venture, you need to go the same place those streaming services went in the sense of getting your own original, exclusive content to the platform being the thing that really makes you stand out. I

think it's inevitable over time. I would say two things. Right now, there's so much to pull in. I mean, the universe is so large of what's out there, and again there's the big brands and the hippie gaels, and so for us, raiding and vetting and finding and pulling in content is and building up these interest space channels is a really exciting challenge and we think very valuable

for for kids and families. That's one. The second thing though, is um where would you begin with originals given our charter um, I think for us like understanding the data of which of the three age segments in preschool, the little kids, the biggest kids, which are the topics really matter? And finding originals that that lean into a really support where kids are gathering is going to be the key for us to get there. It's inevitable, as you say, it's inevitable, but at the right time and with the

right day. Well, you've been down the original programming road before. I mean you were doing it before it was cool. I mean Crackle at Sony. In the early days, you were putting a I think probably the first add supported streamer to put premium content out there. But you know how hard it is, You know how hard it is to break through the clutter. But I would imagine you learned a lot from that. We learned a lot, and and that's why I say, let's let's look at the data.

I mean, we started so early that we were shooting in the dark a little bit, and as we moved on, we really understood. You know, our our audience was a combination of gamers and streamers, and it was a multicultural audience. And when we got into the programming, as we moved on. We really lined that up very specifically, and the more successful shows as we went on, one of them has been a top ten on that that reasonly, um is because we really understood the audience and had the data

to support that versus shooting in the dark. So that's one of the big lessons I'm looking at here. Let's really understand who we're speaking to, what value we're providing them, and how to give them something that's uniquely sensible and differentiated from to another big alligens here. So of course you want kids to know the Sensical brand and have the app on their platforms, do you then need to make that brand known on other platforms YouTube, where they

already are, or social media? I'm just curious. I mean, from our perspective, you know, we we won't use social media to speak to kids, I just thought to parents perhaps, but we will for parents. Yeah, so we're gonna use those channels for parents. Um. I think you you may see us on YouTube as we evolve, or platforms like TikTok as well as we go on. But it's going to be you know, in the right environment, under the right set of conditions. When when you start to see

something like that. We have to be protective of the environment as much as the content, right right. And you know when you mentioned TikTok also you know, as you know, TikTok is is pie a knee ring, a new kind of content that's different than maybe what your licensing. You know, but you have some digital first, digital native content as well.

So is that sort of TikTok style. Is that evident even in the Sensical library, I would say coming soon because that that you can't avoid, Uh, what's going on on that platform and the type of content that's being made. Um. The parent organization of of Sensical Common Sense Networks, UM, we also there are a partner of ours, TikTok, So we're working with them on ratings and partnering with them

to create a family friendly service and offering. And we see the content very closely, what's going on there and the opportunity of what's going on there with kids and some of the value that we can create for the families that are using Sensical with that type of content. So here's a brand question. I understand how parents are made to feel safe by the Sensical proposition. I wonder though, especially when it comes to the older kids, whether sensical

then becomes sort of like the spinach brand. It's associated with high nutrition, which keep parents may like but kids may not. No, that is that is the challenge for us. How do how do you not make us feel like spinish? And we're not just pulling together strict learning uh stuff. There's really fun shows on here and really popular brands

and topics that kids love. You know, as you move up into the eight plus areas, you get more into the how to and the live action and the sports and the dance and the cooking and the d a y and the building and drawing, and so our our goal and what we are doing is having enough of that content to really keep kids interested. But also the

big brands. That's why I mentioned you know, the Nirvana's and then stories and then the Tells and the you know, the hot Wheels and the you know, the barbies and and all of those things that keep kids engaged um and not just have them feel like it's more school time. And then there's another segment of the audience to think about, which is the marketers. How do you appeal without sort of the massive scale that seems to be necessary to

get advertisers attention. How do you get their attention? Um, well, a lot of them are looking for you know, when you advertise to kids, you can't do targeting. So so the whole ad world is moving into all this audience targeting, all the conversation that's happening around that. But you can only do contextual targeting, meaning line up with content that is a proxy for audience when it comes to kids. And right now, a lot of the brands that we

talked to in the agencies are skeptical about um. They don't understand what is the right content and is that content really the proxy for the audience that they want. And so with us, that's what they get an understanding. We have more metadata on what is appropriate content than probably anybody out there at this point in time, as we rate and curate and tag. And that's not only

for Sensible, but that's also for on YouTube. And so that YouTube network of creators that I mentioned with billions of views is also an opportunity for advertisers with us to extend the app by out onto that creator network to get more scale than just buying on the sensible and and that again there's nobody out there that has the data or the wherewithal or can give the third party validation and confidence around what truly is appropriate content

that can line up with your ad campaign. In your point, you made an interesting point earlier comparing common Sense media is interests here to say what the Smithsonian International Geographic have done on their sort of pro for profit me arms. And you know, it's an interesting comparison because you know, you think about something like especially national geographic, massive, massive brand at this point, huge business. How big are the ambitions here for common Sense? Is this about more than

just a streaming service? UM? Yes, I would say, first of all, you know, there's forty eight million kids in the US, but there's um, you know, seventy billion in English language territories alone, and there's two billion kids worldwide. The plan is worldwide, So there this issue exists every um, not just here. But I would say we're starting in short form video UM as a starting place, but the whole key is about rating and curation and brand confidence

for parents. So from short form video, there's lots of other media. There's podcasts, there's music, there's books, UM, there's commerce, there's so many things that when we get parents into the system and kids that we can curate other content experiences for them, and that's where I think this goes over time. Well, it's going to be interesting to watch that growth story take shape. Sounds like you're in for an interesting ride, so looking forward to following your progress.

Thanks a lot, Eric for taking time out to talk about sensical. Thank you great to connect again. Really appreciate This has been another episode of Strictly Business. Tune in next week for another helping of scintillating conversation with media movers and shakers, and please make sure you subscribe to the podcast to hear future episodes. Also leave a review in Apple Podcasts and let us know how we're doing.