The Kids Are Online: As Gen Alpha Flocks to YouTube, the Industry Chases a New Normal

In 2019, 37-year-old Rachel Accurso was looking for a show for her young son Thomas, who had a speech delay. Frustrated by the lack of kids’ TV series that encouraged language development, Accurso, who has a master’s degree in music education, started a YouTube channel out of her living room with her Broadway music director husband Aron. They created song-filled videos and content designed to encourage speech milestones.

Today, “Ms. Rachel” has over 12.2 million subscribers, and Accurso recently launched a merchandise line at Target and Walmart. This mom saw a hole in children’s programming, so she filled it herself — and now she’s a household name.

Accurso’s story helps explain why children are shifting to YouTube in vast numbers and why Gen Alpha is deserting linear television. Unlike traditional television, YouTube is being driven largely by homegrown creators, and as it grabs more eyeballs, linear TV executives are using it as a scouting ground and are being forced to incorporate YouTube into their strategies to promote their shows that end up on streaming platforms.

As TheWrap noted last month, linear ratings for kids’ television have cratered over the last decade, and viewers aged 2-17 are accounting for nearly 30% of YouTube’s viewership. In July, it became the first individual streaming platform to crack a double-digit viewership share, and still amassed 10.6% of all viewing in September, according to Nielsen.

Kids aren’t just moving away from cable. They’re now almost exclusively online.

“Kids are watching YouTube more than they participate in literally any other activity,” Chris Williams, founder and CEO of Pocket.watch, a company that helps turn YouTube family channels into franchises, told TheWrap. According to a study by Precise TV and Giraffe Insights, 81% of children have recently watched YouTube, exceeding other entertainment sources like video on demand, video games, broadcast TV and TikTok. “It’s pretty massive.”

And YouTube is expanding into the living room. “We’re alongside some of the biggest names,” Javoris Hollingsworth, the creator of “Gracie’s Corner,” told TheWrap. “The versatility we have through YouTube is just unimaginable. On top of that, the fact that you have basically zero barriers to entry, it makes a huge difference.”

But as Gen Alpha comes of age in an entirely online environment, traditional media is facing new challenges when it comes to the algorithm-driven YouTube, which delivers much-lower revenues than linear cable has. While creator-driven content booms for this age group, those creators are also struggling to find an audience on such a wide platform — and to make money from it. Meanwhile, parents fret over the lack of content moderation in the “online era.”

It’s the wild west, and the rules for kids’ content online are being rewritten at the speed of the Internet.

Traditional TV’s biggest threat — and collaborator

For children’s TV executives and creators, having a YouTube strategy is essential in 2024 because YouTube is as much a marketing platform as it is a content platform.

For heavy hitters like Disney and Nickelodeon, that includes posting full episodes of shows onto YouTube proper — a strategy that would be unthinkable even five years ago.

“We absolutely use it as a promotional platform,” Vanessa Brockman, general manager of kids, global streaming and international networks for Cartoon Network, said.

“Bluey,” the most-watched TV show for all of 2023, is not just streaming on Disney+ and airing on Disney Channel. The official “Bluey” YouTube channel has a “live” stream going 24/7, during which different episodes play, as well as full episodes on demand on YouTube.

And Nickelodeon has a bevy of “PAW Patrol” videos on the platform with colorful thumbnails that tell viewers (namely parents) how long an episode is and what the episodes are about – like “PAW Patrol Best Moments on the Sea Patroller!” The awkward title for the 90-minute video optimized for YouTube search speaks directly to how even the playing field is on the Google-owned platform.

While ad revenue for YouTube is far lower than linear, putting content on the platform ensures it finds the intended audience, often driving further viewership (and subscriptions) on streaming platforms, as well as increased merchandising revenue and box office. Paramount’s two “PAW Patrol” movies grossed more than $355 million combined on modest budgets of $30 million each.

Many traditional studios have also used YouTube to experiment with their content. In the midst of the COVID-19 pandemic, Sara DeWitt, SVP and general manager of PBS Kids, and her team noticed a startling amount of YouTube searches for one of their shows, “Super Why!” That was odd, since the series ended in 2016 after three seasons.

“It was because parents were looking for media literacy shows,” DeWitt explained. The rise in interest prompted PBS Kids to return to series creator Angela Santomero and production company 9 Story USA to ask if they would be interested in expanding the property. That led to the short form series “Super Why’s Comic Book Adventures.” Now, DeWitt and her team are in conversations about fully rebooting the show.

“This is a place where we can begin to experiment, do research and then model what a YouTube educational experience is,” DeWitt said of the company’s channel.

YouTube consistently examines what topics and trends are resonating with its younger viewers, added Katie Kurtz, global head of youth and learning for YouTube. It then combines those findings with research from third party experts in early childhood development as part of an effort to uphold its standards for “high-quality” children’s content. A calendar of these trends is made available to YouTube Kids’ partners.

That has led to some big names embracing YouTube’s research. Kurtz pointed to the official Disney Princess YouTube channel, which currently has over 4 million subscribers, as a partner that has implemented what the company calls its high quality content principles. The channel currently offers a mindfulness and meditation show based off of the research findings.

“This is where we can really help shape [creators’] content strategies around the needs of an evolving audience,” Kurtz said. “You can see what’s resonating with your audience, and you don’t have to do it multiple years out. You can be nimble.”

Exactly how much money are these widely watched channels making? Despite their dominance on the platform, Williams called monetizing kids’ content “challenging across all platforms.” That’s largely because of the Children’s Online Privacy Protection Act, or COPPA, which means that children under the age of 13 cannot be targeted with advertising using user data. Because of COPPA, if there are 100 opportunities to sell an ad on YouTube Kids, Google is typically selling less than five.

“This translates to very low monetization for kids and family creators,” Williams said.

Still, between the sheer volume of content, licensing deals and expansions into the gaming and merchandising markets, some creators in the space have been able to break out. One of Pocket.watch’s partners, who is a major creator in the kids and family space, generated more than $1 million in revenue from custom content partnerships with brands like Paramount, Nintendo and Hasbro and grew ad media income by over 40% above YouTube’s platform ad revenue.

“Channels like Ms. Rachel, which are at the very high end of audience watch time globally on YouTube, have the opportunity to make millions of dollars per year,” Williams said, “but you have to think about that in perspective of the type of content that they’re making.” Additionally, channels like Ms. Rachel cost less to make than an animated series like “PAW Patrol.”

The rise of homegrown talent

Some of the biggest names in children’s entertainment — Ms. Rachel, Blippi, CoComelon — started as YouTube creators whose passion transformed into a full-time job.

That’s the case for Hollingsworth, the creator of “Gracie’s Corner,” a nursery rhyme channel that has 4.6 million subscribers. During the pandemic, Hollingsworth and his wife turned to YouTube to find entertaining content for their children, but soon they realized “there really wasn’t a ton of representation.” What started as a side project evolved into a series with its own animation studio in Nigeria. Since the channel’s premiere, revenue has been steady with seasonal fluctuations, a representative for “Gracie’s Corner” told TheWrap.

This playground has also served as a scouting ground of sorts for leaders in the space. “The creator economy becomes really vital,” Brockman said of finding new talent. “In the past, an agent would ring you up and say, ‘We’ve got X, Y or Z.’ But now we’re much more proactive in scouting those people.”

Two of Moonbug’s biggest shows — “CoComelon” and “Blippi” — can currently be watched on Netflix and Hulu, respectively, thanks to licensing agreements. The CoComelon YouTube channel currently has 185 million subscribers, and Blippi has 21.9 million subscribers. And Baby Shark, which has 78.7 million subscribers, led to a series adaptation that aired on Nickelodeon and later Nick Jr. starting in 2020.

But these stories are often the exception rather than the norm. Eric Berger, CEO of Common Sense Networks, pointed to Blippi, CoComelon, Ms. Rachel and others as creators who have “blown up,” but not by accident. “They’ve been around for 10 years in the case of some of these services. They’ve really worked the algorithm really well, and success builds upon itself. But it’s very hard to replicate,” he said.

As well as the YouTube model has worked for creators like Hollingsworth and Ms. Rachel, it’s a route that has increasingly become more crowded and less stable even as the creator space has expanded. In 2023, the global influencer economy was worth an estimated $21 billion, according to a report from the influencer marketing agency NeoReach — a 28% bump from 2022. The 2,000 creators NeoReach surveyed were split evenly between part-time and full-time creators, with 48% saying they generated an annual income of $15,000 or less. Only 13% made more than $100,000.

Part of the reason for the low earnings has to do with how platforms have structured their payouts. TikTok’s $1 billion creator fund ran from 2020 to 2023. The platform’s rewards program now requires accounts to have at least 10,000 followers with a minimum of 100,000 views in the past month. Many creators profited from Instagram’s Reels Play bonus program, which was removed in 2023 and has been replaced by an invitation-only bonus program. Snapchat’s Spotlight rewards program, which gave $1 million a day to the platform’s top creators, also ended earlier this year.

YouTube Shorts — a platform for shorter, social-type videos — originally launched with a temporary $100 million fund. That has since ended and was replaced by a program that allows for monetization for any creator with over 1,000 subscribers and over 10 million Shorts views within 90 days. The company has noted it has paid more than $70 billion to creators, artists and media companies in the past three years.

Because the creator-driven children’s entertainment space is “wildly under monetized,” as Berger put it, it is especially difficult to turn into a full-time career. “There’s a lack of confidence in moving dollars, by some brands, over to that platform,” he explained.

That can lead to strategic optimization from creators to drive views. Since YouTube is algorithm-driven, creators are sometimes leaning into what is going to get their video to show up high in search results versus what’s best creatively. The algorithm-driven ecosystem can also result in more questionable material rising to the top.

A potentially dangerous playground for children

Every study from Nielsen’s The Gauge report to Pew Research finds the same result: YouTube is the powerhouse when it comes to children’s entertainment. Roughly 100 million users interact with the company’s youth products every month, according to data provided by YouTube.

But how safe is it, really?

“Our first responsibility, always, is to create a safe experience for our youngest, most vulnerable users,” Kurtz said.

YouTube has created tools to give parents and guardians more control over what their children are watching, from reminders to take a break and bedtime timers to settings around different content levels. In 2022, YouTube also released its “high-quality content principles.” Content that hits these standards must promote qualities such as being a good person, interaction with real-world issues and diversity, equity and inclusion. Channels that fail to meet these five principles may have their monetization and performance impacted.

Since the principles have been introduced, Kurtz noted the team has seen a “real increase” in “quality” content made specifically for children. “Those aren’t just words on a page for us,” she said. “We have a whole team of people around the world who are working directly with creators on how to actually take those quality principles and apply them into their content.”

Despite these good intentions, there are detractors when it comes to YouTube’s content for children. “A lot of it is being created without the best interest of kids in mind. Some of it is good, but a lot of it is just all over the place,” DeWitt said.

An insider professionally familiar with YouTube’s children’s content explained that though YouTube tries to moderate, the algorithm still serves content parents aren’t comfortable with their children seeing. “They’re trying, but it’s not a perfect product,” the insider said.

And all the guardrails in the world don’t matter if they’re not being used. A 2020 report from nScreenMedia and WildBrain Spark found that in a survey of 3,000 participants, 70% of parents said regular YouTube is more popular with their children than YouTube Kids. If a kid ends up on the main YouTube platform rather than the Kids subsection, that puts them at the mercy of the full algorithm.

And unlike linear kids programming, which has standards dictated by the Federal Communications Commission (FCC), the YouTube algorithm can quickly steer viewers to content that’s questionable or even dangerous.

“You can very easily go from watching a train video to watching trains crashing and blowing up,” the insider said.

Guiding anything that evolves as rapidly as YouTube is a daunting task. More than 500 hours of content are uploaded to the platform every minute, according to YouTube. But amid that chaos, the leaders behind the platform are trying to guide the children’s space to be more responsible, like when YouTube launched a Ms. Rachel and “Sesame Street” collaboration in August to help preschoolers feel less afraid on their first day of school.

“We see this huge opportunity to be able to be a real resource for families,” Kurtz said.

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