How YouTuber Ryan Kaji is building a kids’ media empire

In 2015, when Ryan Kaji was three years old, he asked his parents why he wasn’t on YouTube like the other kids he was watching.

Ryan’s mom, Loann, and dad, Shion, created the channel Ryan ToysReview that same year, uploading videos of Ryan opening and playing with toys and conducting at-home science experiments. At first, they thought YouTube would be just another hobby for Ryan, much like swimming or gymnastics. At the very least, it was a fun way to keep their extended families in Vietnam and Japan up-to-date on Ryan’s life in Texas. Ryan ToysReview, which was later renamed, was founded in less than one year. Ryan’s World, was one of YouTube’s top kids’ channels.

[Photo: courtesy of Ryan’s World]

“We saw a tipping point of the channel very early on,” says Shion, whose family’s surname is Guan—Kaji is their stage name. “We were very confused because we were uploading the videos as a hobby, and the production value wasn’t that great either. So at first my wife and I thought maybe somebody was hacking our channel.”

Today, at just nine years old, Ryan is YouTube’s highest earner (child or otherwise) for three years running, According to ForbesThe company made $29.5 million in revenue in 202o. Ryan’s World has more than 45 million subscribers across nine channels and has generated more than 62 billion lifetime views.

“It’s exciting seeing people enjoying my content and what we make,” Ryan says.

Children’s content is the Most viewed on YouTubeIt has made some very young people very successful. But the platform’s evolving policies around permissible content and what can be monetized has created something of an unstable environment for creators, especially for kid-centric channels such as Ryan’s World.

In 2019, Google was fined $170 million because YouTube violated the FTC’s Children’s Online Privacy Protection Act, which requires websites to have certain guidelines for collecting personal data from children under 13. YouTube was fined $170 million for violating the Children’s Online Privacy Protection Act. This law requires websites comply with certain guidelines when collecting personal data from children younger than 13. “It hit us tremendously,”Shion. “More than half our revenue from YouTube decreased since the new regulation.”

Keeping kids safe online is paramount, but critics of YouTube’s response felt it put creators on the hook for an issue the platform created in the first place. According to the Complaint, YouTube touted itself as the premier destination for kids’ content but never bothered complying with COPPA. So when the FTC finally cracked down, YouTube’s efforts seemed more reactive and sweeping, impacting creators far more than a $170 million fine flicked at a company worth billions.

YouTube’s Kidfluencer content has also been under the watch of watchdog groups. These watchdog organizations monitor disclosures of advertising products and service in videos that are targeted at children. The group Truth in Advertising filed a complaint with the FTC against Ryan’s World in 2019 accusing the Kajis of not properly flagging branded videos. The Kajis disputed the claim, stating that they strictly followed YouTube’s guidelines.

Shion stated that he appreciates any efforts to make YouTube safer for children, but acknowledged the volatility of the platform. “Being an influencer is becoming more and more complicated,”He said. “You cannot really rely on YouTube as your full revenue source.”

Shion and his team understood that YouTube wasn’t the only way to grow their company. The massive audience they’d built on the platform opened a lane for licensing and merchandise opportunities. Shion was their guide through this space. PocketWatch, a children’s entertainment studio founded by former Disney exec Chris M. Williams.

Chris Williams [Photo: courtesy of PocketWatch]

Robert Downey Jr., Susan Downey, and Viacom are among the investors backing this company. The Kajis partnered with PocketWatch the year it launched, in 2017, and have since landed licensing deals with Colgate and Kellogg’s; merchandise and product launches in Walmart, Target, and FAO Schwarz; scripted TV shows on Nickelodeon (Ryan’s Mystery Playdate) and Amazon Kids+ (Super Spy Ryan); a virtual world in the massively popular game Roblox; and even Ryan’s own balloon in last year’s Macy’s Thanksgiving Day Parade.

Through these PocketWatch deals, the Ryan’s World brand pulled in more than $250 million in sales in 2020, marking the first year that the Kajis earned more from licensing than from YouTube ad revenue. Still, YouTube continues to play an important role in developing new characters in Ryan’s World who often spill over into many of the endeavors above. It’s the kidfluencer version to a cinematic universe.

“I would look at these stars, characters, and IP that had these massive audiences on YouTube, and I would say, ‘Why aren’t we treating them like we’re Disney?’” says Williams, who serves as PocketWatch’s CEO. “Why aren’t we creating true global franchises from them?”

PocketWatch’s roster boasts other major YouTube talent including Love, Diana (194 million subscribers), EvanTubeHD (12 million subscribers), and the Eh Bee Family (11 million subscribers). But Ryan’s World, PocketWatch’s first partner, has provided a blueprint for what’s possible in children’s entertainment.

PocketWatch is by no means exempt from the conversation surrounding children’s safety online, particularly as it pertains to how a lack of clear legal protections can impact children working as influencers. And now, there’s just as much scrutiny on what kids are watching and being sold as there is on the kids making that content. Williams stated that PocketWatch was a great idea. “is committed to setting the industry standard,”They provide structure and guidance for parents to help them protect their children in an unregulated environment.

The kidfluencer industry is all about safety, labor, advertising and compliance. However, with PocketWatch’s safeguards, not to mention the Kajis’ own rules for their son, Ryan’s World is continuing to build the next generation of children’s entertainment—while making sure its nine-year-old star can still be a kid.

Keep your children safe on both sides

There are some things to consider when navigating the kidfluencer market. Take Truth in Advertising’s complaint against the Kajis, for example. The FTC has rules for all influencers to disclose advertising, but there’s often a sharper eye pointed at content for kids because studies have shown that children ages five and under can’t properly discern advertising from regular entertainment.

Bonnie Patten, executive director of Truth in Advertising, says her team analyzed more than 200 of Ryan’s videos and claims to have found marketing embedded in storylines, as well as activities they felt might be dangerous for toddlers to emulate, such as playing with fireworks or spending 24 hours in a swimming pool.

“Toddlers and young children are a vulnerable population,” Patten says. “So we need to be careful what kind of marketing is coming their way.”

Truth in Advertising’s FTC complaint hasn’t gained any significant traction. Shion says that Ryan’s World was, and is, in compliance with advertising regulations.

“Creating content that is safe and appropriate for our young viewers and their families is very important to us,”Shion. “As the streaming space continues to quickly grow and evolve, we support efforts by lawmakers, industry representatives, and regulators such as the FTC to continuously evaluate and update existing guidelines and lay new ground rules to protect both viewers and creators.”

Patten views deceptive marketing in the same light as the Kajis. “pervasive problem” among kidfluencers.

“[They’re] marketing to their peers and those younger than them in ways that have never been done before,”She said. “And it is very, very effective.”

[Image: courtesy of PocketWatch]

In addition to monitoring what content children are consuming, there’s also the need to monitor the children making the content.

Benjamin Burroughs is an assistant professor of Journalism and Media Studies at University of Nevada in Las Vegas. He has been closely following this issue. research on kidfluencers.

“Because these are families and because it’s play, it’s difficult to have labor standards that are universally applied by YouTube or by the government,”Burroughs: “Some of these families just churn out content. So we need to be careful that these children who are making money for their families are protected in some ways.”

Shion was concerned at how fast the channel was growing in the beginning, so he and his wife started making appearances on camera to ease Ryan’s load of having to carry a whole video by himself. Ryan was limited to filming only three to four hours per week to allow him to still have time for school or other extracurricular activities.

To focus full-time on building Ryan’s fledgling business, Shion and Loann quit their jobs as a structural engineer and a high school teacher, respectively.

“For myself, I was giving up the career that I’d been dreaming about ever since I was little so I could fully support my son to succeed in his career. But I saw a huge opportunity for Ryan in the entertainment business to inspire kids around the world,”Shion. “And as a parent, I was a little bit nervous seeing stories about child actors. We want to make sure any struggles Ryan faces we’ll be there and support him in any way.”

This business has seen tremendous growth over the years. In 2017, the Kajis joined PocketWatch and also started their production company. Sunlight EntertainmentThe company now has 30 editors, animators and voice actors. Shion is the president, Loann, his managing partner, and Ryan, his twin sister Emma, and Kate are creative directors.

Horror stories like Fantastic Adventures on YouTube (which was shut down by its mother in 2019) are at the opposite end of the spectrum from the Kajis. Arrest for allegedly abusing her childrenTo motivate them to perform. But it’s not only extreme cases that advocates are concerned about—it’s parents who inadvertently, or willfully, treat influencer work as playtime.

“Maybe that was the case 10 years ago, when you could [film your kids] on your phone and go, ‘Oh, isn’t that cute?’”Anne Henry, cofounder BizParentzThe non-profit advocacy for children in entertainment. “But influencers are hiring photography teams. They’re editing. They’re creating product. There is no question—it’s a business.”

Last October, the French government made the first step in adopting legislation to protect kidfluencers. The new rules require that any parent/guardian of a childfluencer under 16 years old obtain a work permit. The child will also have the right to be forgotten (i.e. Their content will be removed from a website upon their request; and their earnings will go into an account until their 16th birthday.

The U.S. federal government is yet to pass any law specifically for childfluencers. Some attempts have been made at the state level, including the Coogan Law. Named after former child star Jackie Coogan, who sued his mother and former manager in 1939 for squandering his earnings, the Coogan Law requires 15% of a minor’s earnings to be put away in a blocked trust account, known as a Coogan account. Because of the large number of projects filmed in these states, the Coogan Law does not apply to New Mexico, California New York, Louisiana, New Mexico, or New Mexico. It has not been extended to social media stars. Kansen Chu, a former California assemblyman, tried it in 2018, with a bill that was substantially altered from its original. The main hurdle lawmakers couldn’t clear was how to regulate compensation in the form of toys, clothes, and other goods that companies often send influencers for free.

Recent progress was made by SAG-AFTRA, the labor union that mainly covers actors in film and television, in recent months. Allowing social media influencers to join. It is not clear, however, if union rules or child labor laws can be enforced at the home of a parent for a childfluent than at a major studio.

“It all falls on the parents,”Henry says. “If the parents are doing what they’re supposed to do, great. If the parent is not so conscientious, that’s where things are gonna get ugly.”

PocketWatch was founded in 1982 by Williams. It has guidelines for the children of the childfluencers with whom it works. Outlined in the company’s “Field Guide for Creating Kids Content” are priorities such as mandatory background checks for anyone who works directly with kids; setting the expectation that parents should put their kids’ education, socialization, and family time first; and even guidance on establishing their Coogan accounts. He also said that PocketWatch is careful to keep the talent pool small, despite the number of kidfluencers. In Ryan’s case, Shion says Ryan and his sisters’ earnings are distributed in multiple financial accounts, including college savings, minor accounts, and Coogan accounts.

“We are very selective about who we work with,”Williams: “We vet partners extensively and we only work with a small number, allowing us to provide constant feedback and advice, observe them closely, and, if we ever need to, address any issues immediately.”

Smarter, not harder, is the key to winning

For the Kajis, limiting Ryan’s work hours also provided the opportunity to expand the universe of Ryan’s World by adding a cast of animated characters mainly voiced by other actors. There’s Ryan’s superhero alter ego, Red Titan; The techie geek Combo PandaAnd his sassy frenemy Alpha Lexa; The bookish penguin Peck; and the gummy candy enthusiast Gus the Gummy Gator. Combo Panda and Gus actually have their own separate YouTube channels under the Ryan’s World umbrella, with 1.75 million and 1.7 million subscribers, respectively.

These animated characters can be found on YouTube and then integrated into merchandising, such as the Amazon Kids+ special Super Spy RyanRoblox gaming and many more. Kajis and PocketWatch are creating their own cinematic universes using YouTube. This is despite having relatively low research and development expenses.

“We really believed that Ryan and his universe of character friends were perfect to demonstrate to the entire world that our thesis was correct,”Williams: “That it’s possible to create a whole new category of kids and family franchises that had never been tapped into before.”

David Kleeman, the SVP of global trend at Dubit is a children research and development agency. He believes that children are more likely than adults to consume merchandise and content from multiple categories. “In kids’ media, everything competes with everything,”He said. “So a kid does not say, do I watch Nickelodeon or Disney? They are thinking, what do I need right now? Is it television or is it a game? Is it a tablet or is it a big TV? Based on my mood right now, what do I need?”

Having flexibility and support from PocketWatch helps the Kajis let Ryan’s interests form the basis for how and where Ryan’s World expands.

For example, Ryan started learning about geography and U.S. history last year, which sparked the idea for Ryan’s World Road Trip, a set of collectible toys inspired by each state. He also expressed interest in becoming a game developer in the future, so Shion enrolled him in coding classes—and created his own virtual world in Roblox last December.

“New ideas come up in our everyday interaction with the kids,”Shion.

The KajiFamily [Photo: courtesy of Ryan’s World]

Williams says there are additional initiatives across gaming and consumer products launching this year for Ryan’s World but declined to disclose details.

For Shion, exploring multiple avenues under the banner of Ryan’s World has been the ideal scenario for letting Ryan figure out where he wants to take his career in the future.

“I thought he wanted to be a comedian last year, and now he’s saying he wants to be a game developer,”Shion. “I want him to try different things while he’s a child. The last thing I want is him to feel like he doesn’t have any other options besides being YouTuber.”

Shion believes the PocketWatch partnership made it easier for Ryan, allowing him to create a future beyond YouTube. The video streaming site has been an invaluable launching pad for many creators, but the platform’s evolving regulations, particularly around kids’ content, are taking a toll on creators. YouTube is a great platform but the entertainment industry is still a gray area for kidfluencers. PocketWatch is a clearer way to help build kidfluencer brand identities while protecting against exploitation.

“[PocketWatch has] helped us set up our kids’ financial success among many other important elements to ensure a healthy, safe, and positive experience working in the digital world,”Shion.

As for Ryan, his take on being a kidfluencer is pretty simple—as it should be.

“I’m a kid,”He said, “and I’m doing what I like to do.”

Source: How YouTuber Ryan Kaji is building a kids’ media empire

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