You won't find it in the United States just yet, but Spotify (NYSE:SPOT) has debuted something big overseas. At the end of October, Spotify launched an entirely new app aimed at its youngest listeners.

The new kid-friendly app, called Spotify Kids, is a feature of Spotify's popular family plan. Using a separate app, family plan customers who share their accounts with their children can put a bit of a barrier up between their own recommendations and the curious listening choices that their children may make -- and vice versa, of course. It's an arrangement that should sweeten the deal for customers and Spotify alike.

A woman listens to music on a smartphone.

Image source: Getty Images.

How it works

Spotify Kids gives children a separate app to listen to, but it's far from just being a clone of the regular Spotify app. The Spotify Kids app acts as a "playground" for kids while also effectively providing a set of parental controls. It does not offer its users the full Spotify library the way that the regular Spotify app does. The version of the app that is in beta in Ireland right now provides access to roughly 6,000 tracks, which Spotify says have been hand-picked by Spotify editors. Depending on the age of the kid in question, Spotify Kids might serve up Disney singalongs or age-appropriate pop hits from stars like Taylor Swift. If the kids try to search for Eminem or GWAR, though, they'll presumably be out of luck.

The Spotify Kids app is ad-free, but it's only available to customers who are paying for a Spotify Premium family plan, which is already ad-free. The main appeal, though, is the fact that it liberates parents' Spotify playlists and recommendations from the tyranny of "Let It Go" and "Baby Shark" while protecting kids' ears from more adult-themed tracks. Spotify keeps tracks out based on their lyrics and themes; references to violence and guns, for instance, can keep a track out of the kids' pool.

Spotify's win-win

The app should be a nice perk for family plan users, and it might even help Spotify promote its family plan to new customers (or better retain existing ones). But that's not all: The app also has the potential to help Spotify organize its data- and advertising-focused efforts. That's because the new app is governed by a new privacy policy, one that Spotify says is designed to be compliant with European and U.S. laws regarding data and privacy for young people.

Spotify has been increasingly focused on taking user preferences to target ads more effectively. By creating a separate app for kids, Spotify can reassure parents -- and regulators -- that data related to young people will be treated properly. Tech companies tend to meet with bad PR when they collect and use lots of user data, as tech investors know well. Focusing on this data security for kids could help Spotify preempt a potentially ugly narrative.

To be clear, Spotify would not suddenly be exempt from complying with laws like the Children's Online Privacy Protection Act if it didn't make a kids' app. But Spotify does appear to be doing at least some things with its grown-up app that wouldn't be legal on a kids' app -- like collecting location data, for instance, which is actually required for family plans now.

None of this is to say, of course, that this isn't a nice consumer-facing quality-of-life improvement for family plan customers. It absolutely is, and it could make Spotify's $14.99-per-month family plan -- already a pretty attractive deal to customers in a market in which individual subscriptions go for around $10 per month -- even more appealing. And if it fits into Spotify's big data plans too, well, then that's a happy thing for Spotify.

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