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OMG. WTF. OTT. Part 3 – The Kids Are Alright

It’s a new year and sure enough we couldn’t make it a month before hearing report after report that make executives say, “Oh My God. What the F*#K! Over The Top!”

As we said in our first installment, this is a constant drumbeat and it’s getting louder, only now it’s reaching our children.

This generation, the KIDS generation, is the first truly immersive generation in this new world.

They’re the first generation whose identity is being defined by Instagrams and Vines before they’ve even entered the world .

They’re the first truly connected OTT generation that in reality, may never need to “tune in” to anything but their own personalized feeds of content.

We’re already starting to see the results of that early on in 2015 both in the ratings and the moves made by the major players signaling this massive shift in the market.

Kids TV ratings have exhibited alarming declines recently the WSJ reported Nickelodeon’s ratings are down 32% this season, for example.

This year Nickelodeon announced they would be launching Nick VOD in March and they’d also bringing the retired Noggin Channel back as an ad-free subscription video service.

According to eMarketer, 17.5 million kids, or about 71% of kids under 12, watch Web video. A March 2014 study from Deloitte found teens and people in their 20s spent more time watching TV shows and movies on computers, tablets, and smartphones than they did on a TV set.

It’s an increasingly on-demand world for kids today, with social networks like Youtube and Vine entering the Kids market in the last week few week it’s clear the race is on to deliver the most comprehensive and kid-friendly experience for entertainment delivery.

The Opportunity

So yes, there’s a LOT of activity around kids right now but what does it mean for content creators, traditional networks,

“I think we are going to have a tremendous amount of demand that has been created in kids’ advertising,” said Rita Ferro, exec VP, Disney Media Sales and Marketing, Disney Channels Worldwide in a Variety interview.

While Ms. Ferro certainly isn’t wrong in her statement, we think it’s a lot more than advertising that’s going to be in demand.

It could mean a growth in developers who will become more in demand to build interactive features or games (are you listening Zynga engineers?)

It could mean a continued growth in ad revenue for major social networks who join on to produce kid friendly content (Youtube for Kids, Vine for Kids) and with people like The Fine Brothers getting into producing more and more longer-form kids shows for both social MCN’s as well as major networks alike, it’s not hard to imagine that a player like Facebook would’t enter this market themselves given their recent explosion of video.

The surge of OTT could accelerate purchase of show-related products (character toys, games, etc), so for these content owners there’s a more direct link from distribution to purchase, especially as more and more networks introduce the interactivity features as previously mentioned.

For advertisers, this surge could open up new channels or devices to produce more content with the networks selling around them.

Both Nickelodeon and NBCU’s Sprout have teams dedicated to creating this type of custom content.

For example, Nickelodeon helped Toyota create a custom Sienna tied to “The SpongeBob Movie: Sponge Out of Water.”

The “Saturday Morning Cartoon” might be a dead time slot, but that time certainly isn’t. These growing platforms allows these increasingly digital native parents to have just as much fun when that episode is playing in the background while they’re cooking dinner, or inside a competitors car with the volume turned up on the iPad.

While our own Jesse Redniss might have been a year late, his prediction seems to be taking shape already in 2015.

“When Dora the Explorer asks a question and pauses for an awkward four seconds, instead of yelling at the TV, children now are grabbing a tablet and answering the question. If you have young children, as I do, the targetedFacebook ads for Disney Junior “Appisodes” are ubiquitous.”

The evolution of the kid-specific content creation is about to become an even bigger business when we introduce cross-device experiences and combine new social media trends with the rise of mobile.

Companies like Hullabaloo, which DailyCandy described as: “Choose Your Own Adventure in Narnia” are leading the charge at building these awesome new immersive experiences for kids with smartphones and iPads replacing video games and cartoons as a new vehicle for a new generation of storytelling, developing lasting characters and histories that originate from these apps, instead of on the big screen or in a TV studio somewhere.

For the first fully immersive generation of children, the iPad is increasingly becoming the first screen, the one that’s introduced to them almost at birth because it’s as easy as picking up a Clifford the Big Red Dog Book but it blinks bleeps and responds to touch and motion like the coolest toy you could ever imagine, and you can take it anywhere!

As they grow up, this always-on, on-demand, on-the-go media ecosystem will shape the way they’re going to seek out entertainment, knowledge, and communication in the future. The TV(r)evolution will be #CreatedWith Kids!

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