SuperAwesome CEO Dylan Collins is known for keeping his ear close to the ground and for the fourth year in a row, he invites us into his brain and the trends he sees shaping up in digital media, kids technology, and entertainment. Here’s what’s happening now and in the year (or two) ahead.
- Streaming services double down on content for kids and family to reduce churn
The streaming video wars have shifted from land-grab mode to a more defensive paradigm. With Disney and Comcast posting huge losses, shareholder pressure has focused their efforts on margin. This shift ultimately leads to churn reduction. Kids and family content remains one of the most consistent anti-churn levers that service providers have. Expect to see more investment into kids-related content including games, features, and other areas.
- Adjusting the approach to verified consent
Historically, the approach to supporting kids under the age of consent has been to restrict all access to an app or game until a parent could provide verified consent. This roadblock, unsurprisingly, incentivizes kids to lie about their age. “Cabined accounts” are a new feature launched by Epic Games that allows a child limited access to the service but restricts functionality until the parent has completed the required steps.
- Consolidation everywhere: toys, entertainment, and games
A lot of mergers and acquisitions are coming down the line in just about every sector. Early this year, for example, Moose Toys announced the launch of a new business division dedicated solely to mergers and acquisitions. At a time when valuations are almost universally down, cash-rich companies will be out shopping for deals.
- Mergers in the kids payment space
The kids fintech space has raised over $1B in recent years, yet most of the major players have not expanded internationally. Only GoHenry has started to expand (via their acquisition of PixPay). Combined with the dynamics in the games, entertainment, and toy space above, we’ll begin to see more activity like GoHenry’s in 2023.
- Toys vs. gaming: The showdown
As games become the go-to strategy for connecting with toy fans, it’s starting to become clear that gaming is truly displacing physical toys with regard to play hours. Toy companies will continue to build (or acquire) game development expertise in 2023 in order to stay ahead.
- The emergence of deeper niches in kids products will continue
Niche products and services specifically designed for children, such as Gabb Wireless, Yoto, and Tonies, will continue to emerge in the market. Although historically this segment has been capped in potential (usually by hand-me-down adult devices), an increasingly connected family home is making these niches deeper than ever before.
- Rise of the influencer-based media company
Ten years from now, some of the biggest media companies in the world will have originated as individual content creators. Night Media (Mr. Beast) and Oni Studios (SypherPK) are just two current examples. In 2023, we’ll see more deliberate strategies from creators to transition their business models to scalable companies.
- The balance of kids’ influence starts to shift to Africa and Latin America
Last year birth rates in the US dipped and a similar phenomenon is happening in China. The regions with the greatest number of kids today are now Africa and Latam, a trend which is set to continue. With a growing population of kids, these regions will begin to have more influence over the kids market.
Image courtesy of Jessica Lewis via Unsplash
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