I'm Emily Chang, and this is the circuit. If you've ever walked down the toy isle in walmart or caught one of his famous video reviews, chances are you know Ryan Kaji. He's one of the biggest YouTube kid stars on the planet, racking up billions of views on his various channels. After almost a decade of content creation, He's getting his first major motion picture with his parents and his sisters as co stars.
Like being a guitar, it's very quality.
Behind the scenes of the Kaji Empire is a former Disney executive who saw a tremendous opportunity. Chris Williams, CEO of Pocketwatch, built a company that helps YouTube kid stars transform into global franchises. He's now got over fifty kids on his client roster.
They've won the Hunger Games of YouTube, and it's not because they're lucky. It's not because they gained the algorithm. It's because they've worked really hard.
It's a lucrative but complicated business, sort of like an next generation Mickey Mouse Club. I sat down with Williams to talk about how Ryan and his family can compete with kids entertainment juggernauts like Coco Melon and Pepa Pig and how parents including me should think about balancing screen time with playtime. Joining me on this edition of the Circuit podcast. Pocket Watch CEO Chris Williams.
Okay, first of all, thank you for doing this.
This is absolutely my pleasure. Thanks for being here.
It's so great to be down here.
And as you know, I'm a mom four kids, so very interested in where this whole world is going. Can you start by giving us a little bit of history? Who are you and why did you start pocket Watch?
Sure?
I'm the founder and CEO of pocket Watch, and I was really inspired by watching an incredible transition of how kids were consuming content. And it really transformed from watching a lot of linear television channels like Disney Channel and Nickelodeon and Cartoon Network. And I got to see first hand this transition from those linear platforms and TV channels and into YouTube primarily. And I saw an incredible shift also in my house of kids consuming content much different than we ever did.
Right, Because you're a dad too, I'm a dad and.
My kids were definitely you know, I would come home from a hard day's work and sit down on my couch and turn on my big screen TV with my surrounds and then crash on the floor and fire up their iPhones and watch YouTube videos. And then as a member of this company Maker Studios, which ultimately was acquired by Disney, where I had been before, I really looked and I said, there are these stars, characters and ip
being born through digital creators on YouTube. Why, as Disney, are we not thinking of them more like we think of traditional franchises and expanding into all sorts of other things. So the real mission of the company from the very beginning was to bring kids more of what they love from these digital creators in a lot of new places, just like the way sort of Disney would do it.
So what is your role with these kids versus their parents and agents and managers.
What I would say is that we really rely on the parents to be parents. What we can do is we can determine who we partner with, and this is very important that we share values. We need to partner with parents who prioritize the right things for these kids, and that is everything from health and safety to socialization to education. And even if they don't necessarily know exactly all the right things to do, that's where we can
be really helpful. We can empower them with information. We actually do that with a creator handbook that every single one of our forty seven partners gets when we partner with them, and in it it's all sorts of best practices from really great organizations, from SAG to governmental organizations on everything from how to film your child, how long is the right appropriate number of hours, how to book a studio teacher, how to set aside money for your
child appropriately through Kogan accounts, how to disclose promotional relationships in an effective FTC compliant way. So we really make sure we partner with incredible parents who want to do the right thing, and then we empower them with all the information that they need to be able to do that.
Aren't you the one who's also coming up with the show ideas and the toy ideas and sort of the way to expand the brand.
For the most part, all of our partners have achieved a great level of success on their YouTube channels without us, and in fact, that is one of the things we look for. Sometimes I say that they've won the Hunger Games of YouTube, and what I mean by.
That is it's competitive there.
It's the most competitive platform for video, and they've won this Hunger Games over tens of thousands of other creators trying to do what they have done. And it's not because they're lucky. It's not because they gained the algorithm. It's because they've worked really hard, they found the right things to do for their audience, and then millions of people now love to watch their content.
I was wondering, how much is going viral just luck.
I wouldn't consider these viral stars. I would consider them digital content creators who have amassed loyal followings and deep fandoms. It's not like one off videos. Sometimes you get someone who has one video that goes really successful and then that changes the course and then they lean into it and they decide to use that as a platform to get much bigger and generate a loyal audience. But generally speaking,
these are not necessarily viral. They are folks who've amassed millions, in some cases hundreds of millions of subscribers free subscribers to their YouTube channels. They're generating billions of watch time in minutes, and they've really achieved that success because the content they create is something that lots and lots and lots of kids all over the world want to consume.
Break down the building blocks of a success full YouTube kids Star.
How much is luck, talent, timing.
I think it is a mix of art and science. Like most forms of entertainment, the science part is a bit connected to the hard work and the sense of competition that I think all successful digital creators have. In this environment on YouTube where they're competing against tens of thousands of people, it is very important to have a
competitive feeling and attitude and then talent. I really do, truly believe that the partners that we have who have achieved this great level of success on YouTube have done so because they're talented, just because they've done it on a platform that, to a certain extent is frictionless, meaning they don't have to audition, they're not going through gatekeepers. That doesn't make it any less successful. In fact, I'd argue it would make it more successful that they've amassed this audience.
So Ryan broke out twenty fifteen, What was it about him?
For one, he is incredibly passionate and confident, and he has been since he is six years old, So I just think he had the right mix. His parents have the ability to allow him to pursue this passion of his to make video. I think they've now adopted that same passion and built around Ryan into animated content and all sorts of other things that don't rely on their children nearly as much, and that this has all come together to forge a chemistry that has taken Ryan to
new heights. And then I think from there, from YouTube, Pocketwatch this is what we do. We come in and we say, how can we take what they've already accomplished on YouTube and expand that way beyond YouTube?
When you met Ryan, what did you think? And then what did you do?
Number one? I thought, wherever I put Ryan content and the Ryan's World brand, it would succeed because it had succeeded so well on YouTube. I knew he had a very deep fandom. Kids all over the world love Ryan, and I knew that would I had a tremendous amount of confidence that would translate into other things. So Pocketwatch
we come in. We repackaged the content that they're already making on YouTube, for an example, and then we put that on platforms that are walled gardens that you can't just upload to, like a Facebook or a YouTube, so Hulu, so you know, taking Ryan's content and putting on a Hulu on Peacock, putting it on Sky in the UK, taking that content and starting to build audiences there, and then taking that a step further by doing even a
more premium series with Nickelodeon called Ryan's Mystery Playdate, which our chief content officer, Albi Hecht created and executive produced, and that was our show. And we did that with Ryan called Ryan's Mystery play Date, and then distributed that through Nickelodeon and all over the world ninety episodes, five seasons, Emmy nominated, and Ryan and his family Sean Lean at
the core of that. And consumer products, we were successful in bringing the Ryan's World brand to different types of manufacturers for things like toys and toothbrushes and all sorts of things to put the Ryan's World brand on, and then sold those through Walmart and Target and many other retailers all over the world to great success. And frankly, I believe this opened the door for not just of our other creator partners to walk through, but digital creators
in different verticals. I think if you asked mister Beast why Feastables was available at Walmart, he'd say Ryan's world paved the way because he did.
But can Ryan be the next mister Beast He could?
I don't know. It really will depend on where his interests go. He may be more like a Ron Howard who decides to take a more behind the scenes role in his career. You know, his current passion is wanting to be an animator. You know, the world is his oyster, and I think it really says a lot about his parents and about us that we are not pushing him in any particular direction. He should be free to do
whatever he wants, even if that's nothing at all. I think it's a big part of what we also try and establish for his future.
YouTube Kids can be a super lucrative world. Take us inside that world and what the possibilities are.
Yeah, it can definitely be lucrative. And I think what we really try and focus on is working with these creators to really expand what they're already doing and generate new revenue streams for them on all sorts of different platforms that might not be readily available to them as just digital creators. Right platforms that are closed, things like Hulu and Peacock, and all sorts of platforms like that
they don't necessarily partner directly with digital creators. They want to work with companies who bring them a great supply of brand friendly, kid friendly, family friendly content from these digital creators in a way that's enriched and packaged so that they feel confident that they can put it on their platform. So it's really important that that's a new revenue stream that we can drive for them. We're even doing that now through fast channels, which are free ad
supported television. So you may have heard of platforms like Pluto or the Roku channel or Samsung TV Plus, and these are new channels of distribution that we're packaging this
content into that's ad supported. We even have a new service called Ryan and Friends, which both lives as one of these fast channels and also as its own subscription service for parents to give parents the best of what their kids love about YouTube and environment that's completely safe, and in exchange for that, they're willing to pay a subscription of three ninety nine a month, and in doing so, that creates more revenue and more diverse revenue for creators as well.
Has Ryan been as successful on these other platforms On Nickelodeon, for example, as he has been on YouTube.
Yes, Ryan has been successful in many other areas and platforms, including Nickelodeon. In fact, Ryan's Mystery Playdate, the series we launched on Nickelodeon back in April of twenty nineteen. Forty percent of the audience of the premiere episode had never watched Nickelodeon before. Wow, So he brought an entirely new audience to Nickelodeon. It was the number one show for a couple of years. We went five seasons, nominated for
an Emmy, lost to Sesame Street because everybody does. And as soon as you see you're in that category best Preschool Series, you're like, Okay, we lose thirty five years I think they've won. But yeah, And certainly consumer products, toys especially have probably generated over half a billion dollars at retail since launching in twenty eighteen. So yes, Ryan is very successful. Wherever we put the brand and the content, you.
Now represent so many kids, and there are so many influencers out there, some of them have much bigger followings than Ryan. Talk to us about the other people in this world.
Who's the competition in terms of the creator partners that we have from YouTube, Not all of them are even kids. Could be an animator who's had great success, or it could be a nineteen year old magician from the UK named Dan Rhodes. He was the seventh largest creator on all of YouTube last year. So we really pride ourselves on the diversity of the portfolio of creators that we
partner with. And that's not just traditional diversity, which means so much to us, and that traditional diversity obviously nationality, ethnicity, race, This is very important. We truly believe kids are better off being able to consume content where they can see themselves in the content. We think that's truly important to them. But we're also diverse in genre type and within the kids and family demographic, so we have a lot of
different creators. I think we tend to look for creators that have already succeeded with their own content and then who also have an ambition to go even further, which is not everybody.
Diana is now your biggest star, I guess based on YouTube views.
From a pure audience measurement on YouTube, Diana's a pretty astounding creator.
What is it about her?
Her and her brother Roma have generated an audience that's pretty incomprehensible. They're the third largest creator channel on all of YouTube, not just kids, just broadly Wow, hundreds of millions of subscribers, billions of views every month, and I think they've pioneered a new type of format that worked
really well globally. And I think big part of their success besides the passion for what they do that really shows and their adorableness amongst each other and how they interact with each other, but they've really done this imaginative play type of format where they're pretending, and I think it mirrors the play patterns of kids all over the world,
and they do it with very little dialogue. And by doing it with very little dialogue, it's really easy for kids all over the world who speak all sorts of different languages to embrace Diana and Roma and their content, and I think that's a big key to their success.
Diana and Roma, Vlad and Nikki Nastia. Why are we seeing so many stars from Ukraine from Russia?
That's a really good question. There are others besides those three, but they are all massive with massive audiences, and it's probably something about the culture there. I really couldn't tell you. I don't know the answer to why that particular cultural upbringing has led to three of the largest kids influencers on all of YouTube.
What about the audience like globally, where are the viewers coming from?
For Ryan? For Diana.
The good news about operating on a platform like YouTube, for these creators and for us and being their big partners, is that we can see where the audience is coming from with a very high level of accuracy. So it really depends on the creator. You know, Ryan has always had a very strong English language audience. We've recently started moving heavily into Spanish language. There's a Spanish language channel
on YouTube that's very successful. Now we are now incorporating Spanish language into partnerships for Ryan that we have with cameo content distribution on platforms like Roku, So we're really starting to expand Spanish language there. And you can tell where are the audience is coming from, and so when you look at someone like Diana, it's true maybe only fifteen percent is from the US, where twenty percent might be from India or from the Middle East, So you
see audiences from all over the world. But it really helps guide us in terms of the type of global markets that we want to focus on as we're expanding them onto new platforms.
I'd love for you to break down the building blocks of the business, because I think a lot of people don't understand how it works. What's the most lucrative part of this business? Is it a lot of us on YouTube? Is it getting a show, a movie, brand, deals, merch.
They're all kind of connected. I wouldn't say there is one area that we focus on as the most lucrative. They do all play together. So, for example, content distribution or content syndication, we give them lots of guidance, but then we take that content and we cure it, we enrich it, we package it, and we distribute on all sorts of other platforms. And what we believe that does is also help build the brand in a different context. So I can take let's say Diana content, and I
can put that now on a platform like Hulu. There's an adjacency to content that parents have a different perception of.
Suddenly it's sitting next to paw Patrol, it's sitting next to SpongeBob, and parents are going to view that brand a little differently than having come exclusively from YouTube, and that might open the door for consumer products, or for gaming, or for things that we're going to start exploring this year like live events, and so it is definitely a cumulative effect of being everywhere kids are giving them more about these brands that they love, and just continually expanding
from there. Oftentimes we'll start with content distribution and content syndication and it can be very lucrative as the content makes its way onto all these other platforms besides just YouTube, and it certainly creates a diversity in revenue that is very important for these creators, mostly for their peace of mind to know that they're not one hundred percent reliant on one platform. And we see what that can do
not only to creators but to businesses. So you want to make a real strong effort to diversify your revenue streams, and that's the first way we do it is usually content distribution.
In twenty nineteen, the FTC called out Ryan's channel for blurring the lines on sponsored content. It's called spond com. What did you learn from that or what are the lessons there?
Honestly, we have always been the gold standard in terms of compliance. We believe in the regulatory framework that's out there to protect children and people, And to be frank, I think the people who lodged the complaint didn't fully understand the nature of what required disclosure and what didn't. And as you can see, that was a while ago. No actions were ever taken from the FTC to Ryan or to us on that. And we continue to go
above and beyond what the level of compliance is. That we will always go higher and always be the gold standard in terms of that type of compliance, and we think it's incredibly important. In fact, one of our attorneys here who specializes in this came from an organization called Kiru, which is the children's advertising unit that's part of the FTC, and so it's very very important to us.
I'm a mom, and Guilty has charged my kids watch more YouTube than I would like to admit.
Is all this stuff good for kids?
Is this stuff these kids are making on boxing videos, for example, is that actually.
Good for kids?
I would say, generally speaking, there's a lot of not good for kids things on YouTube, one hundred percent. However, as a company, what we get to do is really carefully select who we partner with, and it is important for us not just that the kids who are in the content are prioritizing the health and safety and well being, but of the audience as well. And I think you see genres just not unlike traditional content, it moves in
and out based on certain popularity. An imaginative toy play is actually a really important aspect of how kids grow up and socialize and learn things. And so there's nothing inherently wrong with imaginative toy play.
Right, But do I want my kids watching other kids playing with toys on a screen versus playing with toys themselves and imagining what could be?
I like to think, and I saw it in my own house as a parent. Maybe you see it is many times what they're seeing on YouTube inspires them to do something that's the best type of content. So you might be watching like a kid's channel that has cooking going on, and now all of a sudden, your kid has a desire to go, hey, let's make this, Let's do this, or it could be some sort of outdoor play or even playing with the toy that the notion that there's someone just like me who I consider in
many ways a friend. I think that's the relationship between the audience and some of the kids on YouTube is one that's more friendly, that they perceive them as their friends, and then they're often inspired to do those things themselves, which I certainly see in my house all the time. Now.
Historically the goal was to be in the Mickey Mouse Club and everything flowed from there.
Is that ara over, No, I think you still have aspirational performers who think of traditional media success as the end goal, and it is a different thing. What I find certainly is with these creators on YouTube, their experience
is different. I always say like one of the things they never have to do is go to an audition and be rejected that in fact, the majority of content these kids create are with their parents, who, at least the ones we partner with, prioritize their health and safety, their well being, their educations, all the things that are really important. The familial part of this is really important.
In fact, I see some of our creators and I wish that I had a business with my kids to be able to spend as much quality time together as they do. It makes me a little jealous.
To be friends.
The landscape is changing though, Like my kids, they watch a Disney movie once and they don't want to watch it again. I would watch The Little Mermaid and the Lion King and send her hundreds of times. Right, So who should be worried? Should Disney be worried or Nickelodeon? Seems like everyone's coming from them. TikTok's even coming for YouTube.
I think as the space evolves, the traditional media companies will embrace this digital content more and more, which will give them access to these audiences like your children, who are veering away from what they traditionally consumed from them. I just think it's inevitable they have to.
So Disney's going to figure it out.
They kind of have to. They don't really have a choice. If you think about what's happening with YouTube and TikTok and what consumers, including kids, are really deriving from these platforms. I do think the traditional system is going to start incorporating elements, but I don't think they're going to go away. I think they're going to continue to make movies and make very premium series, and I think those will have a strong place in the buffet of choices that we all enjoy, including our kids.
So then there's these other emerging platforms like Twitch and Instagram and discord.
How do you think about those?
I think about them all differently. I think YouTube, by coming to terms with the FTC in twenty nineteen and implementing a process by which to distribute kids content safely on that platform, is kind of the only one that has that clear lane today. I expect others to adopt policies to negotiate with regulators on opening themselves up to
engaging kids. But even TikTok is a thirteen plus platform, we all know there's kids under thirteen consuming content there and even making content there, but they're not supposed to, And so all of these platforms, Twitch included, we will likely hold off until they've done what YouTube did, and was to acknowledge that there are kids on these platforms and to really create a safe environment through policies and regulations to engage with them.
Shows like Paw Patrol and Pepa Pick these are juggernauts, but hits like that are hard to come by.
Aren't they? Like? How many more of those kinds of hits what we see?
It's a great question, Emily. I do think there's only a certain amount of massively popular IP that can kind of exist at once. I think you're seeing this in traditional a lot as well. I think as we go through some superhero fatigue and some things like that. I think in kids, the beauty of a platform like YouTube is that it does give kids a really strong opportunity to pursue content that they might not find in other places. And that could be as simple as like, I love
to watch farming videos. Right, we have a partner name of Hudson's Playground. All of Hudson's content is through the lens of a creator on a farm. Right. This is not something you're going to get on traditional television or through movies. But I still think you're going to have a mix, and the brands will just come from different places. We might see a roadblocks game attain intellectual property status
as a massive franchise. You know, you could see things coming from other areas besides just the traditional system, but I think they'll still be throwing out some good big ip.
So compare the top kid entertainment offerings, whether it's Disney or Netflix or Coco Melon or Mister Beast Ryan's World to vladen Nikki.
How do they all stack up to you?
They're mostly different. When you think of platforms, YouTube is in fact the largest platform for kids content in the world. Netflix up there. I think it's second. Disney's probably third, and so I think there are lots of places to consume different types of content, but they usually stand for something.
I think Disney in particular stance a something very specific that when you and your children engage with Disney Plus or their content, that you have an expectation of certain type of content and you're going to be delivered it. Netflix even I think, has a little broader mix, but there's a certain expectation. And then you know platforms like YouTube, it's a much larger variety that opens the door for lots of IP and content that can then actually move
to those Cocoa Melon's a good example. I think that was an incredibly powerful animated series on YouTube and attained the status of the largest channel in the world on YouTube, and it certainly was no surprise to me that it found the same type of massive success when you put it on Netflix and other platforms.
So Disney's third, Right, What is it about Disney? Why has Disney lost its shine?
Well, first off, I'll say I lost the magic. It is a very important word, the magic at Disney. I am a two time Disney veteran, so keep that in mind. I have an incredible admiration for Disney, not just as a creative engine, but for their ability to bring that creativity to people everywhere. I mean, it is incredible in the machine they have for bringing content and IP to people. I think in the case of Disney Plus as a streaming platform, relative to Netflix and YouTube, it's just purely scale.
I think Disney will continue to gain ground, but at the end of the day, Netflix has way more subscribers than Disney, and I think it really comes down to that. I don't think they've necessarily lost the magic. I think they are going through a period that's happened before where they need to refocus their energies on producing great creative which I think they've lost a little bit in the
last couple of years. But I think back to the post Katzenberg era, where they had gone through this incredible run of Lion King and Aladdin and these incredible animated
IP and they went through a real rut. And what happens in that context is something like Disney Channel actually, led by a phenomenal executive, Gary Marsh, incredibly creative, became the tip of the spear for the Disney brand for a while and that was things like High School Musical and Wizards of Waverley Place and that kind of thing.
But now it seems like Disney Channel is not going to.
Be certainly no. But my point is, I think something within the Disney ecosystem will rise and will be the creative engine for the next decade. I think, you know, it could still be Marvel, it could still be Star Wars, it could still be Pixar. I think those things have great opportunity to continue and create a lot of success, but they're also facing a lot more competition than they've ever faced.
You think Eiger can do it.
I'm a true believer. Yes, I've always believed in Bob Iger. I've always believed in his what I would call left brain right brain success, that he is a rare executive that has an credible creative gut. So I think when Bob Iger sees content or a ride or a game or some experience based on the IP, he can tell you whether it's good enough that people are going to love it and it's commercial and that they should invest
heavily in it. And I think that commercial gut, accompanied with his ability to manage a team of one hundred and eighty thousand people or however many people work at the Walt Disney Company. Is a very rare combination, and it's probably why it's so challenging to find a.
Successor we've watched a lot of Coco Melon in my house, not me personally, thank goodness, But.
What's your take on Coco Melon? Like, how big a threat is Coco Melon?
I think Coco Melon is a very, very very big brand. I think what happens inevitably is brand value for franchises like Coco Melon ebbs and flows. I think they'll see their fair share of ebbs, and then they'll have to do some great work to make it flow again, if you will. And that might be a movie, or that might be some event that they can rally behind to invigorate the franchise. You know, you've seen it with Paw Patrol over the last couple of years, where they've done movies, right,
Those are great ways to aventize. Certainly, we believe in that formula of utilizing things like feature films to eventize that particular ip or that particular brand. So I think you'll continue to see a lot of that.
Why is it about Coco Melon that's so addicting.
You know, I don't generally like to judge the audience. This is my title at my last role at Maker Studios, which was a part of Disney, was Chief Audience Officer, and I kind of made it up, but I made it up because it was my homage to the power of real, organic audiences and fandoms. And so kids love Coco Melan and it's not necessarily for me to judge so long as it's not terrible for kids. And I do not believe Coco Melos but for kids at all.
In fact, I think it's deeply rooted in educating kids on morality lessons and many many things that are important that actually we're being a little neglected in traditional entertainment, And so it doesn't surprise me. And I think it obviously has attributes that kids are passionately in love with. And parents don't have to love the content that their kids love. That's not a rule. And there's I think kid for kid content is really important.
So let's flip it instead of making it about the audience, What about the creators? What did the creators of Coco Melan get so right in terms of capturing the audience attention?
It's hard to say exactly. Jay the creator and founder of Coco Melan and his wife certainly were looking for content that they weren't finding for their own children and created it. A lot of stories start that way. In fact, some more current stories like Gracy's Corner, who we love very much. They're not a current partner, but never know love them very much, but they are a lovely family who wasn't seeing enough diversity in the content that they
were consuming. An animated content Coco Melan is an example, wasn't giving them enough diversity for their kids, so they went out and created Gracy's Corner. Now it's massively successful as an animated series based on their daughter, and a whole huge audience of tens of millions of kids has also fallen in love.
The interesting thing about Coco Melan is owning the IP. Do you all wish that you took a page out of the Coco Melon playbook and owned the IP?
I would say, personally, I'm an entrepreneur, I'm a builder. I admire Moonbug that acquired Coco Melan very much. In fact, the founder and I work together and maker studios. But it was a completely different thing. It was built to acquire channels in IP, and that's not us. We were built to partner with incredible digital creators to help build businesses around that. And so it's not that we might
never acquire some IP and we do. In fact, when we partner with our creators, we obviously are investing some cases millions of dollars into new IP with those creators. Certainly we have very large ownership stakes in that as well, but it's just different. I would say we're builders, not buyers.
Yeah, take us inside YouTube's black box.
How does the algorithm actually work?
The algorithm changes frequently in the kid space, but not just the kid space. In fact, you can see sometimes when it's changing through creators that we're not even partnered with. So, for example, mister Beast his rise to success, you can definitely pinpoint a little bit to a change in the algorithm relative to rewarding content that the algorithm believes is good for people.
So the algorithm has given mister Beast a boost.
I believe that he, like many creators, was trying lots of different things, and that altruism became an incredibly important part of his content. One because I think he's a good person but also because the algorithm was shifting to rewarding that at that particular time. So that's where timing comes in the chemistry of his charm, his genuine desire to do good for people hitting the same timing is the algorithm rewarding those things created a alchemy that blew him up.
Interesting.
I'm wondering if is mister be someone you see that will sustain long term fandom.
Probably, I think he will retain fandom for a long time. It's the ups and downs within that context. There might be some peaks and valleys, but I think mister Beast will continue to do quite well.
Talk to us about how does it take kids in and out of these videos without them even pressing a button?
And should we be terrified parents?
I think you can take some confidence in YouTube kids. So that's a separate service that's part of YouTube. You can download it as a separate app or I believe it's also a tab within the app that will create a more kids safe experience. That's not safe enough for some parents, And I do think most parents' greatest concern is not necessarily what their kids are watching, but what
they're watching next. Because it's been served up to them, and there's not a ton of confidence that YouTube is going to be serving them something that is parental approved, so to speak.
And what about YouTube in.
General, Well, YouTube in general, that's the one I'm really my kids.
When they're six, they age out of YouTube kids.
Yes, I think that is going to continue to happen. We're making efforts to build bridges right, and this is our investments to enable parents to enjoy the best things that their kids love on YouTube, but in environments where
they don't have to worry. So that's where our services like Ryan and Friends and our pocket Watch channel on Pluto, and our Ryan and Friant's Plus service on the subscription based service that you pay for it really is trying to fill that void for parents who really want the most safe place for their kids to experience this digital content. So getting the best of it. I want my kid to be able to enjoy seeing himself and the content
and seeing content where the kids look like them. But at the same time, I don't want them going down rabbit holes. I want to know that human beings have curated every second of video in this platform. We provide that service, so our creator partners, we bring in and part of distributing their content is into these safe environments that we create.
And obviously there's only going to be more and more of this kind of distributed content. Right Where is this all going for kids?
I think every generation looks at the younger generations with a little bit of side eye. You know, it wasn't long ago that, you know, we didn't recognize hip hop as music because it didn't have a melody, and now it's the dominant form of music out there in the world. And I think we're going through similar transitions with respect to video and how kids consume it, so that people's initial reactions are because it's not familiar to what they
grew up with. They're going to have a certain cynicism about whether it's good or bad or what exactly it is because it's different. But I do think over time those barriers start to fall. We start to embrace the good, weed out the bad, and end up in a place with kind of a new view on media and content. We often say to move at the speed of a digital first generation, because they're moving really fast into new content types and forms, and we want to be everywhere they are.
We've all seen the horror stories about child kid stars, kids being exploited, kids having regrets, kids hating their parents. I'm curious what you've seen over the course of your career from your time at Disney. What have you seen and what did you learn from it?
Well? Number one is a parent, myself and many of the people who work here are parents themselves. Like we obviously take the health and safety of the child performer. It's the top priority and it's important that we do that. But this is a category that's been around a long time with a lot of important issues to tackle and face. Whether it was from TV shows or from movies or plays, children performers has been something that needs thoughtful consideration for
their health and safety. We are one hundred percent advocates of their being regulation government regulation to protect child performers in this new category. There are some things happening within states that are trying to do that. We are fully supportive of those. In the absence of that, all we can do is set a gold standard for ourselves and our creator partners. We have forty seven of them. We can empower them to do the right things by their kids.
We can just support that effort in any way we can with our partners and certainly support broadly policies, regulations, and anything that's going to be out there to really support the health and safety of these kids.
I mean a lot of people look at some of these parents and think they're exploiting their kids, or at least they're pushing their kids too far?
Are they?
I'm sure some are one hundred percent. The only thing I can say is that the parents that we work with are not that kind of parent. It is an incredibly important filter for us that we share values with these parents, and that means prioritizing the right things. It does.
It means prioritizing socialization, education, health and safety. These are incredibly important values that we have that all the parents that we work with, I know they have that We've vetted them, we're batting a thousand and we have an incredible confidence in their desire to do the right thing. And then it's just about making sure that we help empower them to do the right thing with information.
Have you ever had kids say no, like I don't want to do that.
I will say this, I have said no to families where I've seen the parents interacting with the kids in such a way that made us uncomfortable.
There is a law now about making sure kids get their earnings right. There's a new law about kids having access to their earning.
Well, there's an old law called the Cougan laws and the Coogan Laws are very important laws that are designed for parents of child performers to set aside money fifteen percent of the earnings in a trust account that immediately becomes the child's when they turn eighteen. We obviously pay into coop and cancel sorts of things like that when we're working with kids, and it's part of what we're trying to educate these families on is what's appropriate and
what's not to set aside for their kids. I can certainly say that Ryan and his sisters are well taken care of for the rest of their lives and likely the rest of their kids' lives and their kids' kids' lives, and so we don't have any concerns over that.
One Ryan's getting older, his audience is getting older. What's the likelihood he can become a multi generational hit.
I don't know that Ryan the real kid, as he gets older, what first and foremost he'll want to do? And we would never want to impose anything on him and what the audience will expect or want from him. It's hard to say. What I can say is the beauty of on demand platforms is that six year old Ryan Right is on YouTube forever, attracting a whole new audience of young people all the time. And Sean and Lean, with our help and support, have expanded that into an
animated universe that can live forever. And that is something we do with a lot of our creator partners. We truly believe that if we can establish some new intellectual property built around animation based on the kids, that there will be an opportunity for annuities to pay them and their children and their grandchildren forever.
So you're putting your bed on the Ryan cartoon to keep things going.
I certainly have contributed an immense amount of resources to that end.
Yes, okay, so we've seen some of these YouTube stars try to jump to the big screen.
It hasn't worked yet.
This isn't a slam dunk Right Ryan's movie, It's not a slam dunk.
I think it's a slam dunk. Why I think it's a slam dunk because he has a deep fandom of children that relate to him and love him, and I think they're going to want to see him in different context and we know that already so by having the success for example on Nickelodeon, where we did five seasons of Ryan's Mystery played a to extremely high ratings, in some cases the best on the network. The context can change and we believe that the success will still come.
We're seeing now what gen Z wants. Jen Alpha is next. What does Jen Alpha want?
Clearly Coco, Melanie, Jen Alpha. Look, they move very quickly in terms of what they love, and certainly YouTube still holds a very strong place for what they're focused on and all the diversity that comes from all the different types of content on YouTube before them and then consuming that in places that we put that content as well. But they move fast. I think gaming will continue to
be a big part of it. I think they are the first to really move into the metaverse, and I think you see that on platforms like Roadblocks, Minecraft and now coming quickly Fortnite. Creative be behind that, and I think that's going to be a big, big, big area of where our kids are going.
Do you see the entertainment hierarchy changing, you know, Disney to Netflix, to Nickelodeon, to YouTube, to TikTok, to you know, some of these other emerging platforms that we've talked about.
And I think the ship sailed a little. I think a lot of it's happened, and the size of YouTube and TikTok, for example, in terms of the video consumption, last year, there was a study that reported that less than fifty percent of all video consumption was traditional television.
So the ship has sailed.
Ship's kind of sailed. I think the value of IP remains incredibly important, and so how these big traditional media companies look to bring their IP to audiences in these new formats like games and metaverse. They'll be there, they'll just face new upstart competition.
You obsess over content and IP, and I'm curious, what are the emerging trends in kids entertainment that you're watching?
Yeah, I do, I certainly. I think what I've always tried to do is think a little bit ahead of everybody else and where it's going. It's hard to deny the power of TikTok right now. And it's not just TikTok, it's YouTube shorts as well. So this notion of it's almost like channel surfing. Literally, the experience on TikTok to me is like what I used to do as a kid, where I would just like flip up and down and maybe you like watch five minutes of a movie and
you flip around. TikTok is that, And so I think it's fascinating that we go through these periods where you get these incredible ip and franchisees and brand that you have like a deep affection and fandom for, but that we all still in our diets of media consumption want
this like channel flipping. And I think I don't have any huge predictions yet, but I'm watching that very closely, like what does that mean for people and young people in particular, that type of engagement, that type of interaction that's a bit lighter. So I'm watching it really really closely.
So one of my kids kids going to be watching. Let's go further out.
Oh my god, there'll be in some sort of AI driven metaverse. I'm sure you know that that looks like the real world and something akin to Ready Player one. I imagine these things are coming super fast. I think AI is certainly a category that we focus on a lot at this point. You know, obviously how we can make our business more efficient, but from a creativity perspective too,
in particular working with young kids. One of the things we're always trying to do is make it so they have to do less and less to achieve more and more. Basically and right.
So AI is going to play here.
And I plays a big role here, particularly for kids, and in the way it dovetails with animation. So when we take someone like Ryan for example, and he's superhero animated alter ego Red Titan, who is a very popular character and content already, and then we bring that to a platform like Cameo where it can be voiced by Ryan, but he doesn't have to make a new recording every time,
which would place certainly much unneeded burden on Ryan. So we synthesized his voice utilizing AI, and now he can not only do these cameos through his animated character Red Titan, but he can do them in foreign languages as well, including Spanish, which listening to Red Titan with Ryan's voice speak fluent Spanish was remarkable And now you can do it at scale on Cameo for kids anytime. One of the things we're always trying to do is get on
platforms early. We think it's really important to bring the franchises that we work with onto these platforms early.
Are you concerned at all about how we'll all be compensated with AI doing more and more, how your kids will be compensated.
I think it's really important that they become the masters of a You know what I tell my kids and I tell all the people of the company is AI is not going to replace humans. Humans who use AI will replace other humans, and you should be the ones who understand how to utilize the tools. And I look at it very much as a tool, not as a full replacement. And I think, particularly in Hollywood, I think there is some genuine concern that needs addressing around AI,
and it's legit. They should have some level of concern. But at the end of the day, not everybody wants to be a writer or a creator. You still have to really have a passion for it. And so I think it's the people with a passion for it utilizing these new tools in ways that are going to make them better creators is really how it's going to play out.
So it sounds like you're saying, when AI does all the work for us, at least there'll be a lot of things.
To watch, right, I do worry about you know. I had a conversation with one of my business partners at YouTube, where obviously worked very closely with them, and I just kept saying, like, you're already in an arms race with Asian content farms that are just pumping content onto your platform. But the AI, I mean, there's going to be ten thousand times as much content. So what I think becomes really important trusted curation. I think it's going to get
more and more important. So pocket Watch we really strive to be that trusted curation for parents in a world where content is just growing exponentially and AI is just going to be putting gasoline on the fire, and so you're going to want trusted brands and platforms that you can say, Okay, I know this is all curated by human beings. This is safe for my kids. There's no rabbit holes to go down. It's being enriched for good
moral values and educational values. You know, all those things are going to become increasingly important.
My god, So as a parent, it's only going to get scarier.
Yeah, a little bit, but we're here to help.
Thanks so much for listening. To this episode of the Circuit. You can watch my visit to Ryan's movie set where I meet Ryan and his parents on Bloomger Originals. It's a deep dive on the kids entertainment world. I'm Emily Chang. Follow me on Twitter and Instagram at Emily Chang TV. You can watch new episodes of the Circuit on Bloomberg Television or on demand by downloading the Bloomberg app to
your Smart tv or on YouTube. And check out other Bloomberg podcasts on Apple Podcasts, the iHeartMedia app, Spotify, or wherever You listen to your shows and let us know what you think by leaving a review. They really make a difference. I'm your host and executive producer. Our senior producers are Lauren Ellis.
And Alan Jeffries.
Our editor is Alison Casey. Catch you next time.