Executives polling two middle and high school students at a recent summit on over-the-top services were set back a bit by the middle schooler's frank admission: She doesn't watch Netflix (NASDAQ: NFLX) much, if at all.
Why? There isn't any content on Netflix that interests her, the student told attendees at the OTT Video Executive Summit in Boston on Wednesday. Disney's content, for example, provided exclusively on Netflix, is geared to younger children, she said, while TV series and movie content is either more for an older audience, or no longer fresh enough to be interesting.
"Netflix doesn't have many shows geared toward (my demographic)," she said.
Both the middle and high-school students, whose names are omitted due to their age, use Netflix for catch-up viewing of earlier seasons. But both prefer to watch their favorite programs either as they air, to DVR them for viewing a few hours later, or to purchase them through Apple's (NASDAQ: AAPL) iTunes. The biggest goal: to be able to talk about a popular series with their friends at school the next day.
That doesn't mean Netflix is irrelevant to the younger crowd. A recent informal survey conducted at Marin Academy in San Rafael, Calif., found that 72 percent of its students who were polled have a Netflix account, and 27 percent of users visit the online video service "several times a week," according to a February article in The Marin Academy Voice.
Overall, kids of all ages like OTT services including Google's (NASDAQ: GOOG) YouTube. Further, a recent study by family research firm Smarty Pants found they consider OTT services alongside broadcast channels like Nickelodeon, Cartoon Network and Disney Channel without differentiating between the two.
The 2013 "Young Love" study, which surveyed more than 6,700 U.S. kids ages six to 12 and their parents and evaluated more than 250 brands across 20 categories, found that personal interests drive tweens--kids between ages 10 and 12--toward OTT services that feed those interests.
"YouTube is especially popular with older kids. As they enter their tween years and develop stronger personal interests, they want to explore those interests and broaden their worlds. YouTube offers the ideal venue," Smarty Pants' Melanie Shreffler wrote in a KidScreen Magazine column detailing the study.
"Of equal importance to tweens, who are just beginning to deal with social pressures, it provides the opportunity to discover the next hot video and be the first to tell their friends about it."
That corresponds with the middle schooler's statement to summit attendees that she visits YouTube mainly to watch music videos. Further, she said she only spends about 10 minutes a day on YouTube--enough time to watch the newest video and talk to friends about it.
That interest in discovering new content is an unexploited niche for Netflix, which only just began creating original series for kids, including "TurboFAST," which premiered in December.
"Where streaming services lag--and kidnets have an opportunity to gain some more ground--is that they're not specifically made with kids in mind," Shreffler wrote. "Netflix, Hulu and YouTube all launched as services marketed to adults and rank far lower than traditional kids networks in being 'for kids my age,' which correlates strongly to kids' brand affinity."
So, does one middle schooler's frank statement about Netflix bode ill for the service? No, but its executives, and those at competing providers like Amazon (NASDAQ: AMZN) and NBCUniversal that are developing original content for kids, need to take a closer look at the way tweens are really using OTT or run the risk of losing those eyeballs.
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