With its iconic cartoon characters, movies, theme parks, and more, Disney has practically held a monopoly over children’s attention for nearly a century. But that’s starting to change as kids spend more time on streaming services, which now account for two-thirds of TV watch time for children ages 2 to 11. And instead of watching Disney+, which offers full-length movies and TV shows, these days most children prefer short-form videos on platforms like YouTube. For example, the “Kids Diana Show” has 123 million subscribers on YouTube. Compare that to The Disney Channel, which had 132,000 average daily primetime viewers in 2023. “YouTube is their primary platform of choice,” said Alexia Raven, a consultant who studies kids’ viewing behavior. “It meets them where they are and meets their passions in nuanced ways. It really has shifted the entertainment landscape.”
Part of the issue is Disney’s strategy to grow beyond the children’s market. As the number of kids in the U.S. rapidly shirinks, Disney has branched out into other categories like sports, news, and movies that focus more on adults, not just parents. In 2022, more than 60 percent of Disney+ subscribers were adults without kids at home. As a result, many young children are growing up without the exposure to Disney characters that previous generations had, which could have downstream effects. When Generation Alpha grows up, will they want to spend money on expensive Disney vacations if they grew up watching Cocomelon on Netflix instead of The Lion King like their parents?
Disney is trying several strategies to bring the youngest demographic back to its brand, including posting shorts on YouTube. The company also spent $1.5 billion for a stake in Epic Games, the maker of mega-popular video games like Fortnite. Young people spend a ton of time and money in the battle royale-style game, and as part of the partnership with Epic, players can get new skins, weapons, and seasonal content from Disney brands like Pixar, Marvel, and Star Wars. What’s more, there are rumors of Disney building a store or even a theme park inside the Fortnite world. The goal is to drive more young consumers towards Disney’s own platforms and properties, but only time will tell if Mickey Mouse and his cartoon colleagues can capture yet another generation’s attention.
Questions:
- What could be the long-term effects for Disney’s business if children don’t grow up watching its shows and movies as much as previous generations?
- Do you think Disney will be able to win back young consumers by posting shorts on YouTube and partnering with the makers of Fortnite? Why or why not?
Source: Lucia Moses, “Disney Has a Kid Crisis,” Business Insider, July 15, 2024.