Google is about to release a kid-version youtube app for smartphones
and tablets featuring popular television shows for preschoolers. Interestingly, this App will not be available
at the popular IOS platform, at least initially. You might want to ask, what,
no IOS app? And how do the ads work, if any, for these kids audience? One thing
for sure, there are still a lot of uncertainty around the economics of this App.
Sources has indicated that Google is planning on showing ads
in the App, but one legal concern is that “Google will have had to comply with
the Children’s Online Privacy Protection Act, which is overseen by the Federal
Trade Commission. Among other COPPA rules, websites that cater to children must
notify parents if they collect personal information.” (WSJ.com) If
individual level data cannot be collected, then it is unclear how Google is
going to effectively do their ad distribution job. Another concern might come
from the lack of platform support. The data has shown that on average, IOS
users have higher income than Android users. If there is no IOS platform
support, then is there a strategic portion to the move as well?
A $$ Move
No doubt that an App just for kids will attract a vast
amount of advertisers who are thirst for a channel that they can use effectively
to target the kids “consumers”. Think about it, preschoolers rarely have any
kind of smart phone, thus almost impossible to identify among all the mobile
device users. Given such a kid specific channel, advertisers could finally
identify this segment easily. According to WSJ, “Darcy Bowe, vice president and
media director at Starcom, an advertising agency, said her clients are often
frustrated by lack of digital advertising venues geared for children.” Given
that there aren’t many competing platforms that have such a huge potential for
attracting kids (yes, kids are in general addicted to watching TV programs),
the bargaining power of Google is in much favor.
But could there be a deeper level of reason for such an App,
Given all the potential hassle of getting it approved?
A Strategic Move
Well, one thing we know is that at least in the US, the
annual sales of android devices are dropping compared to IOS. Just last quarter
in 2014, the IOS devices accounted for 47.7 percent of sales compared to 47.6
percent for Android. Although Android is still dominating the overall
smartphone market, Google does need to worry about this change in sales trend. Having
an App like this, if later proven to be popular, will likely to fuel the sales
of Android devices.
One thing they might miss though, are the higher income
families that mostly use IOS devices. If
the advertisers on this App can only target kids from the comparatively lower
income families, then that might be a slight disappointment for potential
advertisers.
A more important aspect might be the long term effect on
people’s consumption habit both for the mobile platform and how they interact
with TV programs. First, if a kid growing up using Android platform, this could
potentially affect their choice of devices when they become teens. Second, kids
nowadays are shifting away from the traditional TV-watching habits that the
last generation might have. One director from Comcast once said that the 7-11PM
prime time is the “God intended” way to watch TV programs. However, it seems
that the majority of teens do not think that way. Watching TV programs on
mobile devices has increasingly become popular not just among teens, but also
among young adults and even mid-ages. An App like this one could further catalyze
the process, resulting in more TV-program consumed from mobile platforms in the
future, therefore eating away TV broadcasters’ share. We will see how that
plays out in the future.
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