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Bored Kids Are Creating a YouTube Boom

By Stephen Lovely – Apr 8, 2020 at 11:00AM

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Typical subscription video-on-demand services like Netflix aren't the only ones enjoying a surge in demand.

The dramatic changes wrought by the COVID-19 pandemic have been brutal for most businesses and investors. But there have been bright spots, particularly in the tech industry. Videoconferencing and other work-from-home services are more in demand than ever. Medical stocks, including those of health insurance companies, are performing relatively well. And streaming home entertainment is thriving too.

As analysts suspected, we tend to stream more movies and TV shows in isolation and quarantine than we did back when most of us still had the option to dine out or socialize with friends and family members. The stay-at-home streaming boom has been good to subscription video-on-demand (SVOD) service providers like Netflix and Walt Disney. The change is helping Amazon's Prime Video and its video rental and purchase marketplace, too.

But TV shows and movies that we know from popular pay-TV networks and past theatrical runs aren't the only big sellers right now. Alphabet's (GOOG -2.73%) (GOOGL -2.50%) YouTube, known primarily for its user-generated content, is seeing surging streaming numbers as well.

Miniature theater seats on a laptop keyboard, facing the screen

Image source: Getty Images.

Aren't children such a joy?

No doubt related to YouTube's big surge are the challenges faced by parents in this pandemic. After all, it's not just offices and other workplaces that have closed their doors: Schools are closed, too. As of early April, schools are closed almost everywhere in the nation.

Status of Public Schools States
Closed, or recommended closed, through April Arkansas, Colorado, Connecticut, Hawaii, Idaho, Indiana, Iowa, Louisiana, Maryland, Mississippi, Missouri, Montana, Nevada, New York, Oregon, Rhode Island, South Carolina, Tennessee, Washington, West Virginia, Wisconsin, Wyoming
Closed, or recommended closed, through May Alaska, Delaware, Florida, Kentucky, Maine, Massachusetts, Minnesota, New Hampshire, North Carolina, Ohio, South Dakota, Texas, Utah
Closed, or recommended closed, for rest of academic year Alabama, Arizona, California, Georgia, Indiana, Kansas, Michigan, Nebraska, New Mexico, Oklahoma, Vermont, Virginia
Closed, or recommended closed, until further notice District of Columbia, New Jersey, North Dakota, Pennsylvania
Not closed or recommended closed No states

Data source: Education Week.

Day care facilities are open in some areas, but the Centers for Disease Control and other experts are recommending that they shut down voluntarily in some cases (such as if there has been "substantial community spread"). For parents who have the relative luxury of being able to stay home from work, keeping kids home from day cares and other support systems in order to better isolate makes sense. Other, unluckier parents may find themselves out of a job and unable to afford day care, anyway: Unemployment is soaring in the face of COVID-19 and its changes to lifestyles worldwide.

It's hard to say exactly how many families with children are self-quarantining, but we can make educated guesses at how many kids are sitting around at home, based on demographic figures. In hard-hit New York City, for example, 2015 figures peg the total population at more than 8.5 million people and the number of children under 18 at just under two million. New York City's public schools alone serve 1.1 million children -- and those public schools are now closed.

The situation is similar, of course, in Europe: Kids are home from school, and in many cases, they're isolated with their parents at home. Time with the children may sound nice at first, but it's clearly wearing on many parents. A whole new subgenre of online content has sprung up around recommending activities and strategies to families in quarantine, with articles on the subject appearing in publications as different as The Atlantic and Parade. "Go play outside" has long been the refrain of many a weary parent, but it's simply not an option anymore in many urban and suburban environments. Happily for parents, there are streaming services like YouTube.

Small children, big numbers

Kids love YouTube. The streaming revolution has lifted all kinds of streaming services, but YouTube's user-creator personalities are particularly popular among younger viewers. Children's videos are among the most frequently recommended by YouTube's algorithm, according to a 2018 analysis by the Pew Research Center, and more children today say they want to become YouTube stars when they grow up than say they want to be astronauts. YouTube's popularity with the young (and the very young) has even been a cause for concern among parents and educators, because YouTube's user-created catalog can include strange and, in some cases, even disturbing videos.

YouTube's regular brand is popular enough with young people. But YouTube also has a kid-focused brand called YouTube Kids. YouTube Kids addresses parental concerns by containing the YouTube experience within an app that keeps the weird stuff out. It's essentially just YouTube with parental controls built into the app, and that makes it easier for concerned parents to relax and let their children watch videos unsupervised.

YouTube Kids is perfectly suited for our strange times, and it's reaping the benefits. According to analytics company Apptopia and customer engagement platform Braze, YouTube Kids led the streaming-service field in user hours in the first quarter of 2020.

YouTube isn't just for the very young, either. It has also made moves to compete with Amazon's video game streaming platform Twitch. Esports are very popular with older children and younger adults, and they are well-positioned in the midst of a crisis that has all but shut down competition from more traditional sports. YouTube offers news coverage, too, which is a good thing to have in a crisis. In correctly predicting the stay-at-home streaming boom, media research company Nielsen pointed to news coverage as a specific focus area for increased viewing during quarantine and isolation. According to the Pew Research Center, the share of users getting their news from YouTube roughly doubled between 2013 and 2018, from 20% to 38%.

Present and future

YouTube's grip on younger viewers is an asset in any situation, and it's looming particularly large during this crisis. While self-isolating and quarantined individuals and families across the world are fueling a stay-at-home streaming boom that has helped Netflix, Disney+, and others, the bored children and harried parents among them are helping to make YouTube's share of the stay-at-home streaming spoils particularly large.

And YouTube's dominance may not be ending any time soon. While older groups have looked for familiar TV show and movie formats in their SVOD services, that won't necessarily be true of younger people. New streaming service Quibi, which will offer super-short clips instead of traditional show- and movie-length content, is among those betting on changing tastes and new formats.

Will a generation that spends the weeks and months that follow consuming YouTube videos, instead of shows like Teletubbies or Sesame Street, ever feel as strong a desire for those older formats as their parents do? Will they raise their children watching such shows? Perhaps they may, instead, do what so many parents are doing right now: Hand their child a tablet or smartphone, and tell them to go watch YouTube.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Stephen Lovely owns shares of Amazon and Netflix. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Netflix, and Walt Disney and recommends the following options: long January 2021 $60 calls on Walt Disney, short April 2020 $135 calls on Walt Disney, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
$97.55 (-2.50%) $-2.50
Alphabet Inc. Stock Quote
Alphabet Inc.
$97.99 (-2.73%) $-2.75
Netflix, Inc. Stock Quote
Netflix, Inc.
$239.15 (-2.47%) $-6.05
The Walt Disney Company Stock Quote
The Walt Disney Company
$97.45 (-1.96%) $-1.95, Inc. Stock Quote, Inc.
$114.70 (-2.81%) $-3.31
Nielsen Holdings plc Stock Quote
Nielsen Holdings plc
$27.73 (-0.41%) $0.12

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