Evan Shapiro on Where Kids Are Today

Media cartographer Evan Shapiro, known for his Media Universe Map and essays in the Media War & Peace newsletters, joined the TV Kids Festival last month for a keynote session with TV Kids’ Anna Carugati. In the interview, transcribed in full below and available to watch on-demand here, Shapiro shared the latest information on how and where children watch content and offered producers and distributors advice on reaching kids and adapting to the changing landscape.

TV KIDS: Every year, for the past few years, you’ve made predictions about the media business, and you made one last year in which you said that YouTube would become the most-watched distributor on television, and it was spot on. Kids have been way ahead of the curve, haven’t they? They migrated to YouTube long before the rest of us did. Talk to us a little bit about that migration.
SHAPIRO: If you think about it—I mean, my kids grew up a long time ago—the television has been used as a babysitter over the years, also an educational device and an entertainment center. The big screen in the living room has traditionally been a way we raise our children. That converted from Nickelodeon and Disney Channel to DVDs to the internet now. The vast majority of kids’ viewing in the home happens on either YouTube or Netflix. You include Prime Video and that’s pretty much the whole picture. Yes, there’s other areas—PBS KIDS, etc.—but that’s where the majority of the viewership is happening. Bluey is the most streamed show in the world and the most streamed kids’ show. So, they have always been looking to other platforms. And yes, YouTube is now the biggest kids’ channel in the world, in addition to being the biggest television channel in the United States. [Kids] led the charge there, but now the fastest growing audience for YouTube on television is people over 50. What happens is that generations tend to age. I don’t think we’ve ever seen one that hasn’t. So, as millennials and then Gen Zers and now Gen A turn 45 and 31 and 16, their habits are now educating the population writ large because they’re the majority of people. They’re 58 percent of the United States. 70 percent of the world’s population are millennials, Gen Zers, Gen A and now they’ll be Gen B. Their habits are just becoming the norm.

TV KIDS: In addition to watching programming online, kids are also playing games and other activities. What are they doing and on what platforms?
SHAPIRO: The gaming universe is pretty diverse. You have to remember that one of the biggest use cases in gaming is mobile. If you ever see a kid with a phone in their hands, a lot of times they’re texting or on social media, but oftentimes, they’re playing a game. And they’re not just [playing] Candy Crush, but Candy Crush is a big one. Angry Birds is another one. A bunch of mobile, app-driven games are really, really popular. Mobile is the majority use case for all gaming. So, that’s going to be true for kids as well. Then, when you look at where else they’re spending their time, they’re in what’s called “live play” mode on Roblox, Minecraft or, when they get older, hopefully, Fortnite, PUBG and others. FIFA, you don’t really download FIFA and play it  like we used to for a session. It’s a live play interface with people from all over the planet. So, they’re a marriage of gaming and world-building and social media at the same time. That’s where a lot of the time is being spent.

What’s interesting about gaming is that it also influences video viewing and audio listening. But when you look at some of the most popular video channels for kids on YouTube, they are gaming channels—channels where people watch other people play games, either in on-demand sessions or very often in live streams.

TV KIDS: You mentioned your kids are older, so are mine. They’re grown-ups now. It was hard enough for us, I’m sure, to limit screen time. I can’t imagine what parents go through today.
SHAPIRO: What’s interesting is we didn’t limit screen time. We actually encouraged screen time, but we co-viewed. That was a big part of it. What is happening now is co-viewing is becoming [big again]. Bluey is huge. It’s not a hit because of kids watching it. It’s a hit because of the co-viewing. CoComelon less so, to be honest with you. And then when you look at things that are popular on these kids’ channels, a lot of them are learning and educational, and that’s a lot of co-viewing too.

TV KIDS: Talking about this big universe, in today’s market, what challenges do producers/distributors face when launching a new show? What advice do you have so that they can get a child to sample their show?
SHAPIRO: The kids’ television production market is in a hard time. A lot of the economics around kids’ programming over the last two decades—let’s go back to the ’80s and ’90s—was advertising. And then advertising was pulled out of all kids’ programming, pretty much everywhere in the world. You can do it, but it’s very difficult and not everybody can do it. There’s a limit there. So, especially for kids’ programming, you have to understand what the business model of the intellectual property is. It isn’t just a TV show. It also has to be merchandise. You have to have a live entertainment idea. Not so much that you have to go to all of them all at once at the start, but you only want to invest time in properties that can traverse a number of different platforms because that’s the audience you’re going after. That’s how they spend their money.

Then, I would take the least expensive route to finding out whether the audience likes what I’m making or not. In doing so, you build community. The biggest change in the industry is that the buyers are now the audience, not the gatekeepers. The gatekeepers are in big trouble, and if you’re waiting to get the money you need to make your project from the gatekeepers, you will be screwed, unless you’re Disney, unless you are a big brand already. But if you’re an unknown person—look, I know people and I couldn’t sell stuff. So, unless you’re a Ryan Murphy or a Shonda Rhimes, it’s going to be very difficult to sell [stuff]. There are fewer shows being made, dramatically in the kids’ space—30 percent down from a couple years ago. 30 percent! So, this is a market that is shrinking. Except that it’s not. There’s more kids’ content. I can show you the top 100 kids’ channels on YouTube. They’re massive. And, by the way, the streamers will spend $4.5 billion on kids’ programming this year. The studios will generate around $4 billion in revenue off of that. So, there is a real vibrant market out there, but you have to understand how to build an audience, how to take what you want to make, turn it into a universe, attract an audience to it and then monetize that audience. It seems obvious those are the steps, but those are the steps. And if you’re waiting around for an alien to land and teach you how to do it, good luck.

TV KIDS: So, how do producers and distributors need to change their view of the market in order to improve their business? Are a lot of people still thinking, “Oh, it’s going to go back to the way it was,” and maybe that’s what’s harming them? What are they having a hard time seeing?
SHAPIRO: I would say have them watch the podcast I did with World of Wonder. If you look at what Randy Barbato and Fenton Bailey have done at World of Wonder over 30-plus years, they are the creators of RuPaul’s Drag Race. They own the rights to RuPaul’s Drag Race. They have a direct-to-consumer streaming service that features a lot of RuPaul’s Drag Race and the 18 other Drag Races they’ve done around planet Earth. They built that by being in direct relationships with their consumers, not through VH1 or [Logo TV]. They have this direct relationship with their customers. It’s not the only part of their business. They sell a lot of television shows. But a good deal of the revenue and a good deal of what they do is direct-to-consumer. They just greenlit a show with Alan Cumming for their own service. They didn’t go try to sell it, they greenlit it. They’re greenlighting a documentary. They do a lot of social action content, especially in the queer community. They greenlight these films and their stuff themselves. Sometimes they wind up selling them, sometimes they don’t. But they have an economic engine that’s always on. It’s always producing revenue while they sleep. And what they’ll tell you is their churn rate is one of the lowest out there. They have a 96 percent retention rate of their audience year over year over year, which is unheard of. And it shows you where we’re going. Except they started doing that 20 years ago. So, this is not a new idea. It’s just now YouTube is involved. And then you’ll hear from the creators, the producers or the studios, whomever, “Well, the advertising alone doesn’t pay for the whole initiative.” One, it can, if you know how to sell it properly, and two, no, it’s not going to be the only thing you do, but [for] audience reach and as a spoke in the hub of your intellectual property in addition to all these other areas, you’re going to need it. You have no choice. YouTube is on TV today. Instagram and TikTok are coming to TV. But regardless of whether or not they’re on which device, you need to be there with your product.

TV KIDS: I’m also hearing from some producers that once they’ve finished developing, before fully greenlighting to series, they’ll put out a little sample on one of the social media sites or YouTube to see if it can start to create a community to help build an audience.
SHAPIRO: I would say also, if you keep going down that track, if you start, instead of a short with a plot, you start with a character and have that character. Now, you’re just talking about shooting on a phone as if a character might, doing their own channel. You can happen upon some really interesting filmmaking. You have an always-on channel, as opposed to dropping it into the sea and seeing what happens.

TV KIDS: You mentioned AI before. It’s scaring the bejesus out of a lot of people, but I think it also has the potential to reduce costs. What are you seeing as to how AI is impacting the kids’ content business?
SHAPIRO: I think it depends on who you’re asking. In the case of YouTube and Google, it’s improving discovery, it’s improving time on platform, it’s improving CPMs. For the artists, it depends on who you’re talking to, but I think writ large, used correctly, it will save costs on things like animation and set-building and a whole bunch of world-building things. But those costs have been coming down dramatically over the years. Unreal Engine is not a new thing. Lucasfilm has been shooting with Unreal Engine for a decade now. But I do think it will help the studios lower costs. Most importantly, I think it’s going to help discoverability and personalization in particular. Those things are intrinsically tied together. It now takes the average consumer 20 minutes to find something to watch on streaming. So, that needs to be fixed, and AI is the perfect thing to fix that.

On the independent creator or the independent studio and producer side of things, it’s going to help those studios save some money, but it’s more importantly going to help them level up to the big studio level in production value at a fraction of the cost. So, no jobs are going to be lost. It’s just that there’s going to be more made, or fewer people on every film, but more films will also be made at a different quality. And it’ll help you test and learn on TikTok and Instagram before you are ready to invest. It’ll help you raise the money. So, I think it’s going to be a big boon for the independent filmmaker and the independent artist out there on many different levels—managing a tour, dealing with tracking your distribution rights for a film that you’ve syndicated across AVOD and FAST. Those things are going to improve dramatically. It won’t be recognizable.

The difference though—just a side note here—is you’re not probably going to be buying that AI directly from the AI creator. You’re going to be getting it in a bundle from Adobe, Microsoft, Apple, Google or Meta. We’re in a hype bubble now around AI, and both the fears and the hopes of it are dramatically overdramatized, which has created a swirl of nobody knows what’s true. There’s a moment that’s going to come where everybody understands what the truth is, and the bubble is going to deflate or pop. We should all be prepared for that, but AI is going to be in all of our technology and all of our art. To be honest with you, it’s going to be unavoidable, even if it’s just how the audience finds you. It’s going to be present. Embracing it and understanding what it is and what it isn’t is the most important thing anybody [reading] this can do. Go explore it, go find out. I wrote a whole piece on AI on my Substack Media War & Peace.

TV KIDS: The kids’ content business has been extremely challenged, as we’ve been talking about. As you look out to the next 12 months, what challenges remain? Are there reasons for optimism?
SHAPIRO: What frustrates me about the kids’ business most is that the challenges are fixable with the reason I’m optimistic. And yet I can’t get the ends of those two things to meet. I talk a lot about YouTube, but I also talk about other social media too. I talk about YouTube most because it’s on TV now. The others are coming. But I also believe that creators are facing the same challenges that studios are because they want to become studios and studios are facing the same challenge as the creators are because they want to become creators. So, there are tools and places where we can all be meeting up. To me, Patreon is a perfect utopia of how there’s an opportunity for creators and big tech to work together. But to me, when you look at Unilever moving 50 percent of their budget into influencer and creator marketing, there’s going to be great economics to being an independent content producer on a moving forward basis. You just have to understand, you have to sit down and build them for your community and the art you want to make. I see both end points. I wish that I could get them closer together. I try to do that on my Substack and on our great podcast. Marion Ranchet also has a great newsletter that she writes, Streaming Made Easy. Alan Wolk of TVREV writes a great deal about this. There are a ton of really good Substack writers out there who are in the non-D movement, in particular for filmmakers, but there’s also kids’ stuff as well. So, go explore. Go look around. There are answers out there. There’s not only one answer. You’re going to have to build it specifically for your enterprise, but the answers are out there.

TV KIDS: I remember a few years ago at MIPTV, your presentation, “Yes, and…” Let’s be open to all things that we might not have thought about before.
SHAPIRO: That’s exactly right. And especially if you’re an independent filmmaker, you’re going to have to partner with some element of people out there. It’s always been true. And, by the way, it’s always been hard to distribute independent kids’ content. So, go where the audience is, and they are on these social platforms first. That’s the first place they go in the morning. It’s the last place before they go to bed.