Why kids streaming content is vital to subscriber growth

Tinky-Winky, Laa-Laa, Dipsy and Po pose for a photo as the Teletubbies celebrate their 25th anniversary with the Lighting of the Iconic Empire State Building on April 26, 2022 in New York City.

John Lamparski | Getty Images Entertainment | Getty Images

“Tinky Winky. Dipsy. Laa-Laa. Po!”

Those four names, the iconic sing-song intro to the “The Teletubbies,” have graced household TVs for nearly 30 years. While the library of episodes hasn’t changed in decades, their role in American media has taken on new meaning in the age of streaming.

“Back in the day TV was a little simpler,” said Dean Koocher a television expert, who spent years bringing international kids shows, including “Teletubbies” and “The Wiggles,” to the Americas.

“Back then there were less gatekeepers, you know, there was PBS, Disney and Nickelodeon was kind of an upstart coming up,” Koocher told CNBC. “The good thing was, if you ever could get their eyeballs, you had a much bigger piece of the market, because there weren’t that many choices for kids.”

Now, shows aren’t just on traditional TV and there are far more places for parents and kids to find content. From YouTube and TikTok to dozens of streaming options, audiences don’t need to wait to watch their favorite shows. Saturday morning cartoons are now everyday-anytime cartoons.

And that’s good for streamers, too, especially as Wall Street profitability pressures mount.

Kids represent a unique demographic for the entertainment industry. Age-specific advertising laws mean companies can’t market directly to them in many cases, but their viewing habits — often favoring repetition of content — makes them exceptionally loyal consumers.

At a time when streaming services are eager to lure in new subscribers and decrease churn, having a hub for family-friendly content is one way to ensure paying members (i.e. parents) stick around.

“Kids and family-friendly content is critically important to both streaming acquisition and retention,” said Peter Csathy, founder and chair of advisory firm Creative Media. “Franchise family-friendly brands are welcomed by exhausted parents looking for some down time as their kids get their screen time.

“Once those kids are hooked on a show, they never leave and will not let their parents even think of leaving,” he added.

That’s vitally important for streaming services, especially as consumers grow more cost-conscious and weigh which services to keep month after month and which services to ditch before the next billing cycle.

In recent years, legacy media companies — like Disney, Warner Bros. Discovery, Universal and Paramount — have scrambled to compete with Netflix in the streaming realm. For a while, Wall Street was satisfied with high subscriber growth and the promise of profitability in the future. However, as ad revenue from linear TV continued to decline significantly, investors quickly reversed course, demanding more immediate earnings growth.

Rinse, repeat

The unique thing about kids content is that…

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Why kids streaming content is vital to subscriber growth

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