May 23, 2024 • 51 mins
Ryan Kaji is the reigning king of toy videos and one of YouTube’s biggest and highest-paid social media stars. Now, at the tender age of 12, he's getting his first Hollywood movie, with his parents as co-stars. Behind the Kaji empire is Chris Williams, CEO of kids entertainment media company Pocket.Watch. On this Circuit podcast, Emily Chang sits down with Williams to discuss the kids entertainment landscape, how kid YouTubers are making a killing across YouTube, merchandising, and brand deals, and how AI will present new challenges and opportunities for young creators.
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Speaker 1 (00:01):
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
(00:24):
his sisters as co stars.
Speaker 2 (00:26):
Like being a guitar, it's very quality.
Speaker 1 (00:30):
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.
Speaker 2 (00:46):
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.
Speaker 1 (00:56):
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.
Speaker 3 (01:21):
Okay, first of all, thank you for doing this.
Speaker 2 (01:23):
This is absolutely my pleasure. Thanks for being here.
Speaker 3 (01:25):
It's so great to be down here.
Speaker 4 (01:26):
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?
Speaker 3 (01:36):
Sure?
Speaker 2 (01:37):
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
(02:01):
and into YouTube primarily. And I saw an incredible shift
also in my house of kids consuming content much different
than we ever did.
Speaker 3 (02:09):
Right, Because you're a dad too, I'm a dad and.
Speaker 2 (02:11):
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
(02:33):
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,
(02:53):
just like the way sort of Disney would do it.
Speaker 4 (02:55):
So what is your role with these kids versus their
parents and agents and managers.
Speaker 2 (03:00):
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
(03:21):
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
(03:43):
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
(04:03):
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.
Speaker 4 (04:15):
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.
Speaker 2 (04:22):
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.
Speaker 3 (04:37):
That is it's competitive there.
Speaker 2 (04:41):
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
(05:02):
people now love to watch their content.
Speaker 3 (05:05):
I was wondering, how much is going viral just luck.
Speaker 2 (05:09):
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
(05:31):
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
(05:54):
content they create is something that lots and lots and
lots of kids all over the world want to consume.
Speaker 4 (05:58):
Break down the building blocks of a success full YouTube
kids Star.
Speaker 3 (06:02):
How much is luck, talent, timing.
Speaker 2 (06:05):
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
(06:26):
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
(06:47):
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.
Speaker 4 (06:58):
So Ryan broke out twenty fifteen, What was it about him?
Speaker 2 (07:02):
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
(07:22):
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
(07:45):
we say, how can we take what they've already accomplished
on YouTube and expand that way beyond YouTube?
Speaker 3 (07:51):
When you met Ryan, what did you think? And then
what did you do?
Speaker 2 (07:56):
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
(08:17):
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,
(08:39):
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
(09:00):
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
(09:23):
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
(09:43):
why Feastables was available at Walmart, he'd say Ryan's world
paved the way because he did.
Speaker 3 (09:49):
But can Ryan be the next mister Beast He could?
Speaker 2 (09:54):
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
(10:14):
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.
Speaker 4 (10:24):
YouTube Kids can be a super lucrative world. Take us
inside that world and what the possibilities are.
Speaker 2 (10:32):
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
(10:55):
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
(11:16):
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
(11:40):
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,
(12:00):
that creates more revenue and more diverse revenue for creators
as well.
Speaker 4 (12:06):
Has Ryan been as successful on these other platforms On Nickelodeon,
for example, as he has been on YouTube.
Speaker 2 (12:11):
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
(12:35):
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,
(12:56):
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.
Speaker 4 (13:09):
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.
Speaker 2 (13:20):
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
(13:44):
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
(14:07):
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.
Speaker 4 (14:23):
Diana is now your biggest star, I guess based on
YouTube views.
Speaker 2 (14:28):
From a pure audience measurement on YouTube, Diana's a pretty
astounding creator.
Speaker 3 (14:35):
What is it about her?
Speaker 2 (14:36):
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
(14:57):
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
(15:18):
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.
Speaker 4 (15:38):
Diana and Roma, Vlad and Nikki Nastia. Why are we
seeing so many stars from Ukraine from Russia?
Speaker 2 (15:45):
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
(16:07):
on all of YouTube.
Speaker 4 (16:07):
What about the audience like globally, where are the viewers
coming from?
Speaker 3 (16:12):
For Ryan? For Diana.
Speaker 2 (16:14):
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
(16:36):
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
(16:58):
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.
Speaker 4 (17:18):
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.
Speaker 2 (17:32):
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
(17:55):
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
(18:17):
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
(18:37):
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
(18:59):
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.
Speaker 4 (19:15):
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?
Speaker 2 (19:25):
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.
(19:48):
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,
(20:11):
which is the children's advertising unit that's part of the FTC,
and so it's very very important to us.
Speaker 4 (20:17):
I'm a mom, and Guilty has charged my kids watch
more YouTube than I would like to admit.
Speaker 3 (20:23):
Is all this stuff good for kids?
Speaker 4 (20:25):
Is this stuff these kids are making on boxing videos,
for example, is that actually.
Speaker 3 (20:29):
Good for kids?
Speaker 2 (20:30):
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
(20:52):
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.
Speaker 4 (21:11):
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?
Speaker 2 (21:18):
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
(21:38):
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,
(22:01):
which I certainly see in my house all the time. Now.
Speaker 4 (22:04):
Historically the goal was to be in the Mickey Mouse
Club and everything flowed from there.
Speaker 2 (22:09):
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
(22:30):
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.
(22:52):
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.
Speaker 3 (23:04):
To be friends.
Speaker 4 (23:06):
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.
Speaker 2 (23:26):
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.
Speaker 3 (23:46):
So Disney's going to figure it out.
Speaker 2 (23:48):
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
(24:09):
a strong place in the buffet of choices that we
all enjoy, including our kids.
Speaker 4 (24:16):
So then there's these other emerging platforms like Twitch and
Instagram and discord.
Speaker 3 (24:21):
How do you think about those?
Speaker 2 (24:22):
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
(24:43):
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
(25:05):
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.
Speaker 4 (25:19):
Shows like Paw Patrol and Pepa Pick these are juggernauts,
but hits like that are hard to come by.
Speaker 3 (25:25):
Aren't they? Like? How many more of those kinds of
hits what we see?
Speaker 2 (25:29):
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
(25:50):
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
(26:11):
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.
Speaker 4 (26:33):
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.
Speaker 3 (26:42):
How do they all stack up to you?
Speaker 2 (26:43):
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
(27:04):
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
(27:26):
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.
Speaker 4 (27:45):
So Disney's third, Right, What is it about Disney? Why
has Disney lost its shine?
Speaker 2 (27:52):
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.
(28:17):
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
(28:37):
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
(28:58):
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.
Speaker 3 (29:18):
But now it seems like Disney Channel is not going to.
Speaker 2 (29:21):
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,
(29:42):
but they're also facing a lot more competition than they've
ever faced.
Speaker 3 (29:45):
You think Eiger can do it.
Speaker 2 (29:47):
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
(30:08):
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.
Speaker 4 (30:30):
Successor we've watched a lot of Coco Melon in my house,
not me personally, thank goodness, But.
Speaker 3 (30:38):
What's your take on Coco Melon? Like, how big a
threat is Coco Melon?
Speaker 2 (30:41):
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
(31:03):
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
(31:27):
that particular ip or that particular brand. So I think
you'll continue to see a lot of that.
Speaker 3 (31:31):
Why is it about Coco Melon that's so addicting.
Speaker 2 (31:35):
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
(32:00):
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
(32:21):
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.
Speaker 4 (32:37):
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?
Speaker 2 (32:49):
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
(33:11):
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
(33:31):
whole huge audience of tens of millions of kids has
also fallen in love.
Speaker 4 (33:35):
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?
Speaker 2 (33:44):
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
(34:05):
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.
Speaker 4 (34:28):
Yeah, take us inside YouTube's black box.
Speaker 3 (34:32):
How does the algorithm actually work?
Speaker 2 (34:35):
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
(34:59):
good for people.
Speaker 3 (35:01):
So the algorithm has given mister Beast a boost.
Speaker 2 (35:04):
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
(35:29):
to do good for people hitting the same timing is
the algorithm rewarding those things created a alchemy that blew
him up.
Speaker 3 (35:38):
Interesting.
Speaker 4 (35:39):
I'm wondering if is mister be someone you see that
will sustain long term fandom.
Speaker 2 (35:46):
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.
Speaker 4 (35:58):
Talk to us about how does it take kids in
and out of these videos without them even pressing a button?
Speaker 3 (36:04):
And should we be terrified parents?
Speaker 2 (36:07):
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
(36:29):
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.
Speaker 3 (36:41):
And what about YouTube in.
Speaker 2 (36:42):
General, Well, YouTube in general, that's the one I'm really
my kids.
Speaker 3 (36:46):
When they're six, they age out of YouTube kids.
Speaker 2 (36:48):
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
(37:08):
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
(37:29):
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
(37:50):
part of distributing their content is into these safe environments
that we create.
Speaker 4 (37:54):
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?
Speaker 2 (38:02):
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
(38:25):
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,
(38:47):
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.
Speaker 4 (39:04):
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?
Speaker 2 (39:22):
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.
(39:44):
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
(40:06):
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,
(40:32):
and anything that's going to be out there to really
support the health and safety of these kids.
Speaker 4 (40:37):
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?
Speaker 3 (40:45):
Are they?
Speaker 2 (40:46):
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
(41:08):
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.
Speaker 3 (41:28):
Have you ever had kids say no, like I don't
want to do that.
Speaker 2 (41:31):
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.
Speaker 4 (41:40):
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.
Speaker 2 (41:47):
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
(42:08):
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.
Speaker 4 (42:30):
One Ryan's getting older, his audience is getting older. What's
the likelihood he can become a multi generational hit.
Speaker 2 (42:37):
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
(42:58):
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
(43:21):
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.
Speaker 4 (43:32):
So you're putting your bed on the Ryan cartoon to
keep things going.
Speaker 2 (43:36):
I certainly have contributed an immense amount of resources to
that end.
Speaker 4 (43:42):
Yes, okay, so we've seen some of these YouTube stars
try to jump to the big screen.
Speaker 3 (43:46):
It hasn't worked yet.
Speaker 4 (43:49):
This isn't a slam dunk Right Ryan's movie, It's not
a slam dunk.
Speaker 2 (43:52):
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
(44:15):
change and we believe that the success will still come.
Speaker 4 (44:18):
We're seeing now what gen Z wants. Jen Alpha is next.
What does Jen Alpha want?
Speaker 2 (44:24):
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.
(44:46):
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.
Speaker 4 (45:06):
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.
Speaker 2 (45:16):
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.
Speaker 3 (45:33):
So the ship has sailed.
Speaker 2 (45:35):
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.
Speaker 4 (45:55):
You obsess over content and IP, and I'm curious, what
are the emerging trends in kids entertainment that you're watching?
Speaker 2 (46:02):
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,
(46:23):
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
(46:45):
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.
Speaker 3 (47:05):
So one of my kids kids going to be watching.
Let's go further out.
Speaker 2 (47:09):
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,
(47:32):
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.
Speaker 3 (47:43):
So AI is going to play here.
Speaker 2 (47:45):
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,
(48:07):
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
(48:31):
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.
Speaker 4 (48:48):
Are you concerned at all about how we'll all be
compensated with AI doing more and more, how your kids
will be compensated.
Speaker 2 (48:56):
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
(49:18):
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
(49:39):
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.
Speaker 4 (49:51):
So it sounds like you're saying, when AI does all
the work for us, at least there'll be a lot
of things.
Speaker 2 (49:56):
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
(50:18):
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
(50:40):
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.
Speaker 3 (50:55):
My god, So as a parent, it's only going to
get scarier.
Speaker 2 (50:58):
Yeah, a little bit, but we're here to help.
Speaker 1 (51:03):
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
(51:23):
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.
Speaker 3 (51:39):
And Alan Jeffries.
Speaker 1 (51:41):
Our editor is Alison Casey. Catch you next time.
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
(00:24):
his sisters as co stars.
Speaker 2 (00:26):
Like being a guitar, it's very quality.
Speaker 1 (00:30):
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.
Speaker 2 (00:46):
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.
Speaker 1 (00:56):
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.
Speaker 3 (01:21):
Okay, first of all, thank you for doing this.
Speaker 2 (01:23):
This is absolutely my pleasure. Thanks for being here.
Speaker 3 (01:25):
It's so great to be down here.
Speaker 4 (01:26):
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?
Speaker 3 (01:36):
Sure?
Speaker 2 (01:37):
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
(02:01):
and into YouTube primarily. And I saw an incredible shift
also in my house of kids consuming content much different
than we ever did.
Speaker 3 (02:09):
Right, Because you're a dad too, I'm a dad and.
Speaker 2 (02:11):
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
(02:33):
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,
(02:53):
just like the way sort of Disney would do it.
Speaker 4 (02:55):
So what is your role with these kids versus their
parents and agents and managers.
Speaker 2 (03:00):
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
(03:21):
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
(03:43):
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
(04:03):
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.
Speaker 4 (04:15):
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.
Speaker 2 (04:22):
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.
Speaker 3 (04:37):
That is it's competitive there.
Speaker 2 (04:41):
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
(05:02):
people now love to watch their content.
Speaker 3 (05:05):
I was wondering, how much is going viral just luck.
Speaker 2 (05:09):
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
(05:31):
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
(05:54):
content they create is something that lots and lots and
lots of kids all over the world want to consume.
Speaker 4 (05:58):
Break down the building blocks of a success full YouTube
kids Star.
Speaker 3 (06:02):
How much is luck, talent, timing.
Speaker 2 (06:05):
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
(06:26):
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
(06:47):
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.
Speaker 4 (06:58):
So Ryan broke out twenty fifteen, What was it about him?
Speaker 2 (07:02):
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
(07:22):
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
(07:45):
we say, how can we take what they've already accomplished
on YouTube and expand that way beyond YouTube?
Speaker 3 (07:51):
When you met Ryan, what did you think? And then
what did you do?
Speaker 2 (07:56):
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
(08:17):
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,
(08:39):
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
(09:00):
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
(09:23):
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
(09:43):
why Feastables was available at Walmart, he'd say Ryan's world
paved the way because he did.
Speaker 3 (09:49):
But can Ryan be the next mister Beast He could?
Speaker 2 (09:54):
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
(10:14):
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.
Speaker 4 (10:24):
YouTube Kids can be a super lucrative world. Take us
inside that world and what the possibilities are.
Speaker 2 (10:32):
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
(10:55):
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
(11:16):
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
(11:40):
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,
(12:00):
that creates more revenue and more diverse revenue for creators
as well.
Speaker 4 (12:06):
Has Ryan been as successful on these other platforms On Nickelodeon,
for example, as he has been on YouTube.
Speaker 2 (12:11):
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
(12:35):
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,
(12:56):
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.
Speaker 4 (13:09):
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.
Speaker 2 (13:20):
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
(13:44):
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
(14:07):
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.
Speaker 4 (14:23):
Diana is now your biggest star, I guess based on
YouTube views.
Speaker 2 (14:28):
From a pure audience measurement on YouTube, Diana's a pretty
astounding creator.
Speaker 3 (14:35):
What is it about her?
Speaker 2 (14:36):
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
(14:57):
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
(15:18):
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.
Speaker 4 (15:38):
Diana and Roma, Vlad and Nikki Nastia. Why are we
seeing so many stars from Ukraine from Russia?
Speaker 2 (15:45):
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
(16:07):
on all of YouTube.
Speaker 4 (16:07):
What about the audience like globally, where are the viewers
coming from?
Speaker 3 (16:12):
For Ryan? For Diana.
Speaker 2 (16:14):
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
(16:36):
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
(16:58):
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.
Speaker 4 (17:18):
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.
Speaker 2 (17:32):
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
(17:55):
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
(18:17):
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
(18:37):
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
(18:59):
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.
Speaker 4 (19:15):
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?
Speaker 2 (19:25):
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.
(19:48):
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,
(20:11):
which is the children's advertising unit that's part of the FTC,
and so it's very very important to us.
Speaker 4 (20:17):
I'm a mom, and Guilty has charged my kids watch
more YouTube than I would like to admit.
Speaker 3 (20:23):
Is all this stuff good for kids?
Speaker 4 (20:25):
Is this stuff these kids are making on boxing videos,
for example, is that actually.
Speaker 3 (20:29):
Good for kids?
Speaker 2 (20:30):
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
(20:52):
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.
Speaker 4 (21:11):
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?
Speaker 2 (21:18):
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
(21:38):
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,
(22:01):
which I certainly see in my house all the time. Now.
Speaker 4 (22:04):
Historically the goal was to be in the Mickey Mouse
Club and everything flowed from there.
Speaker 2 (22:09):
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
(22:30):
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.
(22:52):
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.
Speaker 3 (23:04):
To be friends.
Speaker 4 (23:06):
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.
Speaker 2 (23:26):
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.
Speaker 3 (23:46):
So Disney's going to figure it out.
Speaker 2 (23:48):
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
(24:09):
a strong place in the buffet of choices that we
all enjoy, including our kids.
Speaker 4 (24:16):
So then there's these other emerging platforms like Twitch and
Instagram and discord.
Speaker 3 (24:21):
How do you think about those?
Speaker 2 (24:22):
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
(24:43):
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
(25:05):
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.
Speaker 4 (25:19):
Shows like Paw Patrol and Pepa Pick these are juggernauts,
but hits like that are hard to come by.
Speaker 3 (25:25):
Aren't they? Like? How many more of those kinds of
hits what we see?
Speaker 2 (25:29):
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
(25:50):
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
(26:11):
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.
Speaker 4 (26:33):
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.
Speaker 3 (26:42):
How do they all stack up to you?
Speaker 2 (26:43):
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
(27:04):
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
(27:26):
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.
Speaker 4 (27:45):
So Disney's third, Right, What is it about Disney? Why
has Disney lost its shine?
Speaker 2 (27:52):
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.
(28:17):
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
(28:37):
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
(28:58):
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.
Speaker 3 (29:18):
But now it seems like Disney Channel is not going to.
Speaker 2 (29:21):
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,
(29:42):
but they're also facing a lot more competition than they've
ever faced.
Speaker 3 (29:45):
You think Eiger can do it.
Speaker 2 (29:47):
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
(30:08):
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.
Speaker 4 (30:30):
Successor we've watched a lot of Coco Melon in my house,
not me personally, thank goodness, But.
Speaker 3 (30:38):
What's your take on Coco Melon? Like, how big a
threat is Coco Melon?
Speaker 2 (30:41):
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
(31:03):
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
(31:27):
that particular ip or that particular brand. So I think
you'll continue to see a lot of that.
Speaker 3 (31:31):
Why is it about Coco Melon that's so addicting.
Speaker 2 (31:35):
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
(32:00):
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
(32:21):
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.
Speaker 4 (32:37):
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?
Speaker 2 (32:49):
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
(33:11):
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
(33:31):
whole huge audience of tens of millions of kids has
also fallen in love.
Speaker 4 (33:35):
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?
Speaker 2 (33:44):
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
(34:05):
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.
Speaker 4 (34:28):
Yeah, take us inside YouTube's black box.
Speaker 3 (34:32):
How does the algorithm actually work?
Speaker 2 (34:35):
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
(34:59):
good for people.
Speaker 3 (35:01):
So the algorithm has given mister Beast a boost.
Speaker 2 (35:04):
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
(35:29):
to do good for people hitting the same timing is
the algorithm rewarding those things created a alchemy that blew
him up.
Speaker 3 (35:38):
Interesting.
Speaker 4 (35:39):
I'm wondering if is mister be someone you see that
will sustain long term fandom.
Speaker 2 (35:46):
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.
Speaker 4 (35:58):
Talk to us about how does it take kids in
and out of these videos without them even pressing a button?
Speaker 3 (36:04):
And should we be terrified parents?
Speaker 2 (36:07):
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
(36:29):
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.
Speaker 3 (36:41):
And what about YouTube in.
Speaker 2 (36:42):
General, Well, YouTube in general, that's the one I'm really
my kids.
Speaker 3 (36:46):
When they're six, they age out of YouTube kids.
Speaker 2 (36:48):
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
(37:08):
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
(37:29):
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
(37:50):
part of distributing their content is into these safe environments
that we create.
Speaker 4 (37:54):
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?
Speaker 2 (38:02):
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
(38:25):
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,
(38:47):
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.
Speaker 4 (39:04):
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?
Speaker 2 (39:22):
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.
(39:44):
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
(40:06):
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,
(40:32):
and anything that's going to be out there to really
support the health and safety of these kids.
Speaker 4 (40:37):
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?
Speaker 3 (40:45):
Are they?
Speaker 2 (40:46):
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
(41:08):
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.
Speaker 3 (41:28):
Have you ever had kids say no, like I don't
want to do that.
Speaker 2 (41:31):
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.
Speaker 4 (41:40):
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.
Speaker 2 (41:47):
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
(42:08):
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.
Speaker 4 (42:30):
One Ryan's getting older, his audience is getting older. What's
the likelihood he can become a multi generational hit.
Speaker 2 (42:37):
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
(42:58):
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
(43:21):
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.
Speaker 4 (43:32):
So you're putting your bed on the Ryan cartoon to
keep things going.
Speaker 2 (43:36):
I certainly have contributed an immense amount of resources to
that end.
Speaker 4 (43:42):
Yes, okay, so we've seen some of these YouTube stars
try to jump to the big screen.
Speaker 3 (43:46):
It hasn't worked yet.
Speaker 4 (43:49):
This isn't a slam dunk Right Ryan's movie, It's not
a slam dunk.
Speaker 2 (43:52):
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
(44:15):
change and we believe that the success will still come.
Speaker 4 (44:18):
We're seeing now what gen Z wants. Jen Alpha is next.
What does Jen Alpha want?
Speaker 2 (44:24):
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.
(44:46):
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.
Speaker 4 (45:06):
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.
Speaker 2 (45:16):
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.
Speaker 3 (45:33):
So the ship has sailed.
Speaker 2 (45:35):
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.
Speaker 4 (45:55):
You obsess over content and IP, and I'm curious, what
are the emerging trends in kids entertainment that you're watching?
Speaker 2 (46:02):
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,
(46:23):
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
(46:45):
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.
Speaker 3 (47:05):
So one of my kids kids going to be watching.
Let's go further out.
Speaker 2 (47:09):
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,
(47:32):
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.
Speaker 3 (47:43):
So AI is going to play here.
Speaker 2 (47:45):
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,
(48:07):
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
(48:31):
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.
Speaker 4 (48:48):
Are you concerned at all about how we'll all be
compensated with AI doing more and more, how your kids
will be compensated.
Speaker 2 (48:56):
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
(49:18):
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
(49:39):
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.
Speaker 4 (49:51):
So it sounds like you're saying, when AI does all
the work for us, at least there'll be a lot
of things.
Speaker 2 (49:56):
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
(50:18):
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
(50:40):
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.
Speaker 3 (50:55):
My god, So as a parent, it's only going to
get scarier.
Speaker 2 (50:58):
Yeah, a little bit, but we're here to help.
Speaker 1 (51:03):
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
(51:23):
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.
Speaker 3 (51:39):
And Alan Jeffries.
Speaker 1 (51:41):
Our editor is Alison Casey. Catch you next time.
Host
Emily Chang
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