Welcome to Lowpass! This week, I chatted with kids streaming expert Emily Horgan, and went to Google’s I/O developer conference to find the latest in entertainment tech.

Embracing Elmo, being cool with teens: Insights into Netflix’s kids content playbook

Earlier this week, Netflix announced that it will be the new home for Sesame Street. As part of the deal, season 56 of the show will air on PBS as well, with new episodes launching on Netflix day-and-date – an unusual arrangement for a company that tends to write big checks for exclusives.

Sesame Street’s move to Netflix comes after HBO decided not to renew its agreement with Sesame Workshop. So what does it mean that Elmo, Grover and Cookie Monster are coming to Netflix? Why is kids TV working for the streamer, but maybe not its competition? And what about Neftlix’s plans to expand into kids gaming, starting with a Peppa Pig game this week?

To get answers to all of that, I caught up with Dublin-based media consultant Emily Horgan, who has been tracking kids streaming trends for her Kids StreamerSphere newsletter for years. Horgan has also been using Netflix’s bi-annual data dumps to dive deep into kids streaming trends for her Netflix Kids Content Performance Reports, and she shared some of her findings with me.

The interview has been edited for length and clarity.

How big a deal is it for Netflix to get Sesame Street?

It’s a big deal. It's great for Sesame Street. It's great for kids media because it's such a rightly beloved brand that is a real value-add for kids. [Making] sure that it has a sustainable future is the right thing [to do].

The thing that I find most surprising about the [deal] is the PBS relationship. Netflix are playing very nicely with PBS. Exclusivity is not the name of the game, which is something that Netflix aren’t known for. I think it’s an additive element of the deal. I hope Netflix sees it that way, and they don’t feel like they have conceded with the windowing.

But yeah, it’s great for Netflix, it’s great for Sesame Street. It’s great for kids, which is actually the most important thing.

Sesame Street did have a deal with HBO Max before this. Why did that not work for HBO?

They wanted to make a swing broadly when they set up as a streamer. And in this era of the streaming race, broad means kids. At the time, Sesame Street was a great asset for them. It feels that with the rebound back to HBO, they want to be this prestige TV offering now, and kids is not part of that. And I get that. Kids doesn't necessarily sit comfortably with that. You can't necessarily have The Last of Us and Big Bird.

So, yeah, it's definitely Netflix's gain. Is it HBO Max's loss? I would question their step away from younger audiences, because I think you need to have an audience on-ramp. 

You’ve been tracking Netflix’s kids content very granularly. So what kind of kids content does perform well on Netflix?

In the data, what we can see is that preschool content is at the top. And that makes sense, because preschoolers have a limited media footprint. They're allowed to be put in front of Netflix because it's a safe space for them – which I think it is. It’s better than YouTube. It’s definitely better than free rein on an iPad. So, preschool content definitely over-indexes.

I was surprised to see the amount of YouTube IP that was part of that. We all know Cocomelon is huge. But [there is also] Galinha Pintadinha from Brazil, Bebefinn, which is like the Baby Shark answer to Cocomelon - I thought it was interesting that all those were so concentrated.

When we go a little deeper, we see that low- to no-dialogue comedy works really well. That's maybe nothing new, Tom and Jerry has been around for 85 years. Having said that, there’s a view in the industry, at least in the last few years, [that]  it's a cheap thing to do, an efficient thing to do. You don’t have to dub it. But it actually works. It actually connects. A preschooler can watch it with his 9-year-old brother, and they can both get something out of it, if it’s something like Shaun the Sheep.

One of the coolest things about Netflix dropping data is [that] the picture builds for what is doing good, and what good looks like. There’s a few girl IPs that have launched, which are Unicorn Academy from Spin Master, Mermaid Magic, which came from the creator of Winx Club, and Princess Power, which had all the stakeholder credentials, but maybe didn’t do the audience work. We could see that Mermaid Magic and Unicorn Academy did a lot more in audience engagement. Unicorn Academy had a Roblox strategy, Mermaid Magic had broader social platforms too. It just helps to build the picture of what the playbook is in streaming.

In your most recent report, you point out that movies have been a bit of a weakness for Netflix. How so?

Animated movies are huge business in streaming. With Netflix in particular, that Universal deal across Illumination and DreamWorks is driving two billion hours viewed in 2024. So they're depending on a third party for that amount of engagement. If Universal decided to take those movies elsewhere, it would leave a real gap for Netflix. They had some isolated success with [in-house titles like] The Sea Beast and Leo, but the latest big movie, Spellbound, really did underperform.

Any other interesting trends you’ve spotted?

Netflix are really good with teen content. Netflix are cool for teens. Do you know how hard it is to be cool for teens? It's really difficult. They're cooler than Disney+. YouTube is also cool. But when we talk about that audience conveyor belt, they got kids. Then, they're able to bring older kids and teens into content like Wednesday, like XO Kitty, like Stranger Things even. They're very good at not [being] condescending to kids of that age. Their audience pipeline is really solid.

Netflix recently announced plans to expand into kids gaming, and launched a Peppa Pig game this week. What’s your take on that?

The idea of there being a Netflix gaming for kids is interesting to me. In a world where they are being compared to YouTube so much, it's something that gives a point of difference, that YouTube aren't doing.

And [their pitch is]: Put your kids with Netflix. They're going to be safe, whether it's streaming, or whether it's gaming. I can get behind that. It’s the right thing, and it also makes good business sense.

Your Google I/O entertainment tech cheat sheet

Google held its annual Google I/O developer conference in Mountain View this week, which was once again heavily dominated by all things AI. In addition to Google’s Gemini AI assistant coming to Chrome, a new virtual clothes try-on feature for Google Shopping and a new AI search mode, the company also once again announced plenty of products and features that could have big implications for anyone working on entertainment technology.

I was at the show and stood line for two hours for a hardware demo so you didn’t have to. Here’s what I found:

Google’s AI video generator is getting better. Merely a year after debuting its first generative video model Veo, Google is already unveiling Veo 3. The new version can generate audio to go along with your video, including sound effects, ambient noise and dialogue that is lip-synced with the video.

Veo 3 is also supposed to be more accurate than its predecessors. Besides introducing Veo 3, Google also added a bunch of new features to its predecessor Veo 2, including camera controls and object removal.

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