Ampere Commissioning Data Reveals Industry Challenges & Opportunities

Olivia Deane, research manager at Ampere Analysis, guided MIPJunior delegates through some sobering but insightful data on the kids’ commissioning landscape at MIPJunior’s pre-opening conference sessions in Cannes yesterday.

While commissions are down in the kids’ sector across the board, Deane highlighted the opportunities for children’s content producers during her session, noting that the genre remains paramount for SVODs looking to minimize churn, pubcaster commissions are up, and acquisitions are rebounding amid the reduction in originals.

Deane’s session was titled Mapping Out a New Era of Kids TV & Entertainment and saw her outlining the key shifts in the landscape over the past two decades “to find out why the industry is where it is now and what that means for the future.”

The period from 2004 to 2014 was marked by the explosion of pay-TV services for kids, the emergence of on-demand and the rise of broadband and online video, allowing kids to watch content whenever—but with parents still in full control of the television set. “During this period, pay TV accounted for 70 percent of all of the growth in the media market,” Deane explained. “The rise of pay TV saw an era where children are technically able to watch kids’ content at any time. This, in turn, drove demand for acquired and commissioned original children’s content. However, it was still limited because adults still had a monopoly on television. So this meant that young people in the household were either going to be forced to watch Desperate Housewives with their mom or they were going to find entertainment on the only other device in the house: a computer.”

That first decade saw the arrival of YouTube and Netflix—the platforms that would help dictate the trends that shaped 2014 to 2014, which Deane dubbed as the era of the “OTT golden years and peak TV.”

The period saw content investments reach new milestones, but “this boom couldn’t continue forever,” she said. “More recent saturation of both consumers and content sees this reaching what we’re calling the end of peak TV.”

During this second decade of marked change, pay TV saw significant contraction, as subscription OTT, VOD and FAST advertising saw significant gains. “As we’re seeing the streaming market enjoy this rapid growth, we also see consumer behavior continue to evolve. The proportion of households that owned more than one TV-connected device actually almost doubled over the period. This increase was largely driven by households with children.”

This development helped boost commissions and acquisitions, Deane said. “The increase in demand saw streamers under pressure to build a catalog that would appease their newest, youngest consumer group. As a result, more children and family titles were acquired by streamers than any other scripted genre in 2021. This rapid growth in acquisitions from a relatively new business line is seeing money flowing straight back into children’s commissions. Between the first half of 2021 and 2022, when the whole media market was enjoying this rapid growth, the best way to stand out was higher value original content, and that included children’s titles. So, the volume of children’s commissions announced increased by 53 percent between 2020 and 2022.”

While this was a boom time for producers, “flooding the marketplace with such a high volume of titles has quickly led to problematic levels of saturation. The amount of children’s content currently in the marketplace is just overwhelming.”

Indeed, per Ampere’s cross-platform analytics service, in Q2 2024, there were over 389,000 hours of children’s content available to watch on streaming platforms or TV. “Quite frankly, that is a staggering amount of television to get your head around. So, not accounting for sleep, it would take you 43 years to watch all of the children’s content available in the first quarter of this year.”

That data does not include YouTube or Facebook content, “so, in reality, the numbers are much, much bigger.”

Further, Deane added, streaming growth has stalled, leading to slowing commissioning trends. From the first half of 2022, which had a peak of 9,843 commissioning kids’ titles, 2023 saw a 12 percent drop to 8,706. In the first half of this year, commissions fell by 5 percent to 8,291.

“We can’t wholly attribute this to streamers,” Deane continued. “Although streaming companies do account for a large proportion of spending in the media landscape, other commissioners have also been struggling. A declining Western economy has had an impact on the volume of titles being commissioned. That has then been further compounded by industrial action in North America.”

Children and family is the second most-impacted genre when it comes to commissions, falling 13 percent from the first half of 2023 to the first half of this year, Deane said. “This decline has mainly been driven by streamers. SVOD announcements of children and family titles decreased by 40 percent over this period. The main reason for this is data-led. With streaming growth slowing, commissioners have to be more selective with their spending on original content, and data can help them understand what motivates people to subscribe.”

Per Ampere’s data, the number one consideration for consumers to sign up for an SVOD service is sports, at 41 percent, followed by price (38 percent) and available TV shows (30 percent). “Only 15 percent of SVOD consumers in Q3 2024 reported signing up for the service because it had content their children wanted to watch.”

Deane then highlighted the growth opportunities for kids’ IP owners. Keeping an eye on data is paramount, she explained. Per Ampere’s own analysis, children and family was the second most-viewed genre on Netflix in the first half of last year, behind crime and thriller. “Children are not a major motivating factor for consumers when deciding to subscribe to a service. However, they still play a really important role in subscriber behavior. Households with children are not only more likely to have more devices, but they also make up a very large proportion of Netflix viewing activity. As a result of this, those living in households with children are less likely to cancel their subscriptions than those without children. So, while children’s content isn’t enticing people to sign up, it is stopping them from leaving. At a time when subscription growth is stalling, retention is more important than ever.”

Deane continued, “While streamers are limiting their budget for new, original or even exclusive children’s content, they are also acquiring large volumes of existing children’s content to appease this still very important consumer group.”

Of note, Netflix kids’ commissions fell 42 percent, while acquisitions rose 7 percent between H1 2023 and H1 2024. Apple’s commissions fell by 58 percent, but acquisitions rose by 16 percent. Disney commissions were stable, but acquisitions were up 4 percent. Peacock’s commissions plunged, but buys were up 30 percent. Of the majors, only Hulu reduced both acquisitions and commissions.

The big studios are at the forefront of content sales amid this boom in acquisitions, but “most content is still sourced from independent producers,” Deane explained. “So we’ve got a really active acquisitions market. But if you can’t secure a commission to make the content, how can you compete for sales?”

On that front, she highlighted some innovative funding models, citing Ankama’s video-game-based Wakfu, which first launched in 2008 and was canceled in 2010 before being given a new lease on life when Netflix acquired the show in 2014. “The company immediately capitalized on the international exposure it got from being on Netflix and started a Kickstarter to dub the title in English. This fund actually reached its target in just one day. With the title now available in English, the IP continued to gain momentum until 2020, when, having reached 39 different markets, the company launched a second Kickstarter, this time to fund a fourth season. The target was reached in just an hour of the campaign being launched. If we skip ahead four years, the fourth season is finally released. The title, at this point, has reached 52 different markets and is now available on Prime Video as well as Netflix. At this point, there’s no need for the company to launch another Kickstarter because they’ve gained enough funds to announce the production of the fifth season, and that happened in the second quarter of 2024. This is an excellent example of how creatives don’t necessarily need to reinvent the wheel to find success in this era, post-peak TV. They could instead look at their back catalog, maybe leverage previously popular titles that were overlooked at a time when the focus was all on new original commissioning.”

Deane also urged producers to explore YouTube-first business models. “We know that households with children are watching more free social media than ever before. The time that households spent watching free social media increased by 14 percent between 2022 and 2024, and that made it the second fastest-growing viewing type, behind AVOD. If you’re feeling the squeeze in terms of your household budget, you won’t subscribe to a new paid-for service when your children are just as happy to be sat in front of something you get for free. However, YouTube is still not a trustworthy platform for parents. Even though kids love it. So, this means we’re starting to see more YouTube-style content on more trusted platforms.”

She continued, “Free-TV platforms represent an increasingly good opportunity for production companies looking to sell their assets internationally. There’s historically been a stigma about YouTube content, but I think there are clear signs that it’s coming to an end, especially in terms of children’s content. Creators have proven the power of free-to-air platforms to promote and monetize high-quality children’s content. It’s also an opportunity to build a fan base to make your intellectual property more attractive to global players.”

The most notable success on that front has, of course, been CoComelon, which launched on YouTube in 2006 “and, almost 20 years later, is still making distribution deals globally, and a lot of that is just repackaged content. The parent company, Moonbug, has then re-created this YouTube-first business model with multiple other titles, and in the first quarter of 2024, Moonbug-produced content was sold to 25 different streamers.”

Another example is the CAKE-distributed Lucas The Spider, which started as a YouTube short before becoming a long-form show from Fresh TV. “It was released in 2021, and then in Q2 2022, Amazon took on the title. This accelerated its global appeal. At the end of 2023, the show switched to Netflix, at which point the title reached 42 different markets. It’s a clear example of how starting small can still lead to big success.”

Deane also highlighted the crucial role of pubcasters in the children’s commissioning space. Between the first half of 2023 and 2024, pubcaster commissions rose 7 percent as SVOD commissions fell 40 percent, commercial free-to-air fell 32 percent, and pay TV dropped 17 percent. “In this time of commissioning downturn, we’re likely to be reminded of the distinct value of public broadcasters, particularly when the market is proving so volatile.”

In the first half, renewals made up 59 percent of all children’s commissions announced by public broadcasters, a 21 percent increase from 2021. “It’s a way for commissioners to safeguard their spending. This is a trend we see across the board.”