Archive for the 'Interview' Category

How 2016′s 7 biggest kidtech moves will impact 2017

Thursday, January 26th, 2017

[The following is an extended version of a feature article I wrote for the online magazine Kidscreen, January 26, 2017. In this version you will find additional interview quotes and financial details of business deals mentioned.]

What a year 2016 was for kids digital businesses. From Age of Learning’s US$150-million funding injection, to LeapFrog jumping ship to VTech, there were plenty of opportunities—and dollars—to be had. But rising to the top were seven major moves spanning the app, toy, education and investment worlds, and their impact will only begin to materialize in the year ahead. This rings especially true when it comes to building platforms and brands, the growth of subscription pricing and the state of venture capital investments. Let’s take a closer look:

1. Age of Learning receives US$150-million venture investment

This was a major business announcement, not just for the kids space but also within the entire venture capital community. Age of Learning’s flagship digital product is ABCmouse, and over the last few years the company has consolidated its offering by allowing a single user account to be accessed across online, tablet or smartphone devices. (Consumers purchasing a single subscription can add up to three users, and schools have access to the product for free.)

As with many traditional subscription products sold to kids, keeping your user-acquisition costs low is important, but you also don’t want to curtail long-term sales growth. Ongoing subscription renewals are vital for growing business revenues, and the cost of renewals is a fraction of what it takes to acquire a customer for the first time. Revenues from subscriptions are the lifeblood of ABCmouse, so Common Sense Media‘s report that trying to cancel one is challenging at best, is not surprising.

Since the investment by Iconiq Capital, Age of Learning has been on a hiring spree in order to develop a deeper content base, push new older-skewing products and continue product expansion into emerging markets like China. While Age of Learning has not said so specifically, one also has to wonder about sales expansion opportunities in India, too.

One brand related lesson can be learned here from a past business mistake from LeapFrog, another company mentioned in this article. Historically, a company that starts off selling consumer products almost exclusively to young children will face a major challenge when trying to age up their product lines and related sales. This was a problem for LeapFrog over a decade ago when the company went after a new revenue stream by selling learning products to tweens. There were many challenges to LeapFrog in pursuing the tween marketplace but maybe the biggest was the perception of their brand by the audience they wished to sell to. Up until that point LeapFrog sold primarily preschool through first grade products. To a tween LeapFrog products were perceived as a “baby thing”, and who could blame them? Aging up a company’s product line is a major challenge without first creating a new brand that appeals to that new demographic. While this was a hard lesson for LeapFrog, could Age of Learning run into a similar problem as they try to age up their ABCmouse product? Granted, schools buying an educational product push the wares onto students, and students have almost no say about the learning materials they’re forced to use. Still the brand perception of a “baby thing” can jeopardize sales to older audiences.

2. VTech acquires LeapFrog for US$72 million

The sale of LeapFrog came as a shock to many fans of the beloved brand, though a potential acquisition had been in quiet discussions amid falling quarterly sales, profits and stock prices. According to Tom Kalinske, who was LeapFrog’s CEO between 1997 and 2006, and an active board member at the time of last year’s sale, it was difficult to see the company sold, though it provided the greatest return to investors.

In terms of financials, LeapFrog was at its revenue apex in 2005, bringing in more than US$650 million globally. Compare that to VTech’s electronic learning division, which was hauling in US$281 million at this time. However, by the 2016 acquisition, LeapFrog’s last trailing 12 months of financials show it brought in US$223 million, while VTech revenue had swelled to US$657 million globally, amounting to a swap of fortunes for the two companies.

When asked what the main challenges were for LeapFrog, Kalinske points to the changing nature of platforms that parents wish to buy for their children.

“The sale of LeapFrog to VTech reflects the dramatic change of parents originally wanting to buy hardware-related learning products, to a new desire to buy software-based ones. LeapFrog didn’t move fast enough to get their content onto other platforms,” Kalinske says. “If you add up all the software apps and learning apps, as a market it’s not a bad picture. What was bad was all the custom tablets, like Nabi, Fuhu, and even LeapPads, specifically designed for kids. Moms decided they didn’t need them anymore because they could do the same functions with their phones or older hand-me-down tablets. In this regard, LeapFrog did not move quickly enough with this market change.”

Kalinske also adds a second mistake LeapFrog made was not making basic lower-priced learning toys as VTech was doing. As a result of not addressing this consumer interest, LeapFrog lost valuable market share to VTech as a result.

When asked about venture investments in the kids space, John Barbour, LeapFrog’s most recent CEO, asks, “How come over the last eight to 10 years there’s been an immense amount of investment in educational content for kids, but yet only a handful of companies have truly been successful in having a significant return on investment?” He says there maybe 100 companies have put money into this space, with a bulk of them ultimately failing.

Reflecting on more recent changes, Kalinske shares that raising capital is hard for any company, and while landing seed funding to jumpstart a business is not impossible, the process of moving past seed funding to a future investment is currently challenging. He adds, “Investors are looking for more traction and more revenue these days. The venture capital world and its judgment of startups in this space is even harder than it used to be. It’s a pretty tough place to be in right now. While it’s hard in the kids space, the story is not all doom and gloom, there are some successes out there still.”

Ironically, just after the acquisition, LeapFrog announced its new online learning service called LeapFrog Academy. While in development for some time before the acquisition, could this new subscription-based product be part of LeapFrog’s master plan to compete with ABCmouse? Barbour mentions that simply taking advantage of subscription pricing to sell more apps and generate more income will not work for everyone.

“Subscription pricing is the panacea everyone hopes will save business lives, but it doesn’t work that way. To be successful in the kids subscription space, you need to have a brand that people really trust, with an abundance of content. It should be more than what anyone would ever need as part of the value proposition, and you also need a strong customer-acquisition and management infrastructure,” Barbour says. “ABCmouse has much of that, especially the strong customer-acquisition and management model. ABCmouse has succeeded here where the bulk of everyone else has failed because they are usually missing one or all of those three key elements.”

3. Spin Master acquires Toca Boca

Another striking announcement was the sale of children’s app world darling Toca Boca to Canadian toy company Spin Master. Rumors of the sale had been floating around for more than a year before the formal announcement, with a purchase price predicted to fetch as much as US$100 million. Speaking with Björn Jeffery, CEO and co-founder of Toca Boca, he confirms his company was in discussions with a number of buyers, though he points out the sale was handled by parentco Bonnier, and not Toca Boca.

A recent business filing by Spin Master states the acquisition price as being just under US$31 million, which is far from what speculators had been anticipating for a company with more than 150 million app downloads. Jeffery mentions Toca Boca had seen healthy revenue growth year over year since its launch in 2011, and had been a profitable company up until 2015. That was when Toca Boca started investing in its SVOD service, Toca TV, which launched last summer.

Now that Toca Boca is part of Spin Master, the level of business experience and support in this domain has been, according to Jeffery, “a very positive thing.” Where such an acquisition opportunity allows one to “draw strength and experience from another company.” Jeffery shares “it’s nice to have found a new home, Spin Master has a vision and an idea of where they hope to go with us, and that’s not the environment we came from working under our prior owner. That intent makes a huge difference from a strategic perspective.”

Jeffery sees how many kids app companies seem to be giving up on consumer sales and notes how some of these companies are shifting to education. This shift allows businesses to pursue larger B2B school sales rather than smaller, individual B2C sales. Jeffery believes this is most likely being driven by the difficulties to monetize in B2C. “It was not easy being a kids app developer in 2016, and it will not get any easier in 2017 either.”

When asked about what the 2017 kids app space will look like, Jeffery says companies are either “working small,” or “going big,” and there is no in between. Developers either choose to work with a handful or fewer number of people, making a small existence for the team. Or they go big, trying to raise venture investment dollars and create something really large. There are not many kids app companies that choose to be mid-sized. Jeffery describes this as, “the polarization of the industry,” where one is not better than the other, it’s just there’s not a middle ground.

As for app subscriptions in the kids market Jeffery says “It’s still early to say how subscriptions will play out. It’s hard to tell if there’s a greater purchase demand for kids apps in the app stores with subscriptions than without it. It’s clear by the number of companies offering subscriptions, it’s busy, there are many more subscription offers now than before, though these are still very early days for subscription pricing.”

4.) Khan Academy acquires Duck Duck Moose

Most players in the children’s app world will point to Duck Duck Moose (DDM) as one of the industry’s earliest successes. Launched in 2008, three friends formed the company with a mission to engage young children using high-quality educational apps. By 2012, DDM was one of the first kids app companies to receive venture investment to the tune of US$7 million, with just 2.5 million app downloads at the time. Last year, DDM announced it had been acquired by video learning powerhouse Khan Academy. Just before the acquisition, DDM had reached 10 million paid app downloads.

The deal was unusual by nature. DDM was a for-profit company and its buyer a non-profit one, resulting in a combination that would not provide a significant return on investment. This combination was enabled by Omidyar Network, the philanthropic investment firm and first underwriter of a new early learning initiative at Khan Academy, that will be led by DDM. Omidyar provided an initial $3 million US grant to support two years of future DDM operations, and Khan Academy will continue raising funds to support this early learning initiative. Khan Academy works in a similar way where it seeks out grant investment to develop and support its vision of free learning materials for all. As part of the acquisition plan DDM, which previously sold its apps for a price, would now give them away for free.

Caroline Hu Flexer, CEO and founder of Duck Duck Moose, mentions her company had many acquisition conversations, and had for-profit offers that could have resulted in a more lucrative deal. However, the opportunity to make a difference, to make a lasting impact and to reach as many kids as possible might not have been the outcome with the other suitors.

In the few months following the acquisition, DDM has seen an additional 15 million app downloads without releasing a single new product. This brings its lifetime global app download count from 10 million to more than 25 million.

“Khan Academy has such reach and great distribution, which is why wanted to collaborate with them” says Flexer. “The impact we’re making at a global level is amazing. We’re now hearing from teachers all over the world about how this move has provided them with access to high-quality materials that they couldn’t get before. This is what we have wanted to do all along, which is to figure out how to make the biggest impact with kids, and especially those who wouldn’t have the means or resources to benefit from our apps.”

Flexer shares their expertise all along has been in app development, which her small team will continue to focus on. Being part of the non-profit Khan Academy now means DDM will be funded by philanthropic support and community donations, like all other Khan Academy initiatives. No longer will DDM need to rely on app store sales to sustain their company.

This acquisition also offers a great brand lesson. Khan Academy’s products are thought of collectively as for older users, whereas DDM’s products are a perfect fit for younger audiences. This acquisition helped broaden Khan’s reach into the preschool set, and did so with the combined expertise coming from two distinct brands, with one targeting older and one targeting younger.

5.) StoryToys, Amplify and Touch Press merge

Both StoryToys and Touch Press are known in the app world for creating great apps, with the former focusing on younger kids and the latter on older ones. Amplify Education was a digital K-12 division of Rupert Murdoch’s News Corp. News Corp sold the Amplify business to it’s management team in 2015, who were backed by Emerson Collective, an education foundation started by Laurene Powell Jobs, the wife of late Apple founder Steve Jobs.

In 2016 it was announced that the games business of Amplify would merge with StoryToys, along with the app portfolio and brand of Touch Press, under a new company Touch Press Inc. If you’ve followed along this far, here’s a somewhat confusing element to this whole deal – it has also been backed by an Emerson Collective Investment vehicle, Amplify Education Partners.

Barry O’Neill, CEO of StoryToys, is now CEO of Touch Press, which will be the parent company for the collective. (StoryToys and Amplify serve as imprints.)

“Subscription models, both platform and publisher-led, will become the predominant content business model by the end of 2018,” O’Neill says. He also keeping content platforms agnostic as they continue to change over time.

As for venture investment O’Neill notes “There’s a well-documented Series A cliff that has compounded the perception that venture capital has dried up for kid tech companies. Easy access to consumer market via the app stores and rapid product development tools such as Unity have led to an explosion of mom and pop shops, as well as micro-startups,” he says. “Many of these have been able to secure initial seed capital through funds and accelerators, which have also proliferated over the last few years. However, the availability of Series A has not kept up with the pace of seed fund investment, hence the perception that venture capital is harder to come by.”

6.) Zynga’s learning games accelerator Co.Lab closes

Co.Lab was a nonprofit initiative founded in 2013 by commercial gaming company Zynga and education investment company NewSchools Venture Fund. Co.Lab was an accelerator that invested mostly in learning game startups. During the time it was in operation, it had seen 28 different companies go through its program. (StoryToys was one of them.) Each company received some amount of investment dollars in exchange for a small amount of equity back to Co.Lab to help mentor those companies growth.

Last spring, Co.Lab executive director Esteban Sosnik announced in a blog post that Co.Lab would be closing its doors. This came as startling news to many in the kidtech and edtech worlds. In particular, it gave the impression of a contracting and unhealthy kids business.

However, as Sosnik describes it from the investor’s side of a deal, the perceived venture investment problem has less to do with venture companies pulling back and more to do with how seed funded companies are not scaling revenues large enough to appeal to venture capital funds. Sosnik states both the consumer and school markets are very complex, which can add a level of complexity for scaling a business. The problem also intensifies with companies that rely on producing a lot of content, as content is so expensive to develop.

While Sosnik is no longer part of Co.Lab or Zynga, he is now a partner at Reach Capital, a company still making investments in the edtech startup space. Sosnik says he’s seeing a lot of activity in the K-12 and college-level education space, and Reach is making investments with a US$53-million fund it started in 2015. What he and other partners at Reach are looking to do is back entrepreneurs that value impact and can make a difference, especially among lower-income and underserved communities. (Note the similar goal to investment foundation Emerson Collective mentioned above.)

Sosnik also sees potential in startups that target two consumer business areas in particular. The first being consumer purchased early childhood products, as parents spend a significant amount of money preparing young children for school readiness. The second is college readiness, with products that cater to SAT prep and college admissions needs. Esteban points out that these are the two largest consumer learning business sectors.

Sosnik is also focused on finding companies that have a consistent revenue stream throughout the year, possibly through consumer holiday sales combined with school sales over the summer, or through ongoing monetization from subscriptions sales. Strong revenue potential coming from one of these two revenue models is part of what Sosnik looks for when considering future investment deals for Reach.

When reflecting on platforms, Sosnik is quick to say “Everybody in technology wants to develop the next ‘go to’ platform.” Historically this hasn’t happened, though Sosnik points to early platform successes that have helped increase communication between schools and parents with companies like ClassDojo or FreshGrade. (Note, Reach Capital is an investor in both of these companies. Emerson Collective is also an investor in FreshGrade.)

7.) Apple announces subscription pricing for developers

Apple made the announcement in mid-2016 it would begin to expand subscription pricing options to all app developers, including companies that create apps for kids. Shortly after Apple’s announcement, Google made a similar subscription announcement for Android developers. Since these announcements, how has subscription pricing benefited app industry generally, and kids app sales specifically?

While Apple was responsive to requests for comment, no new information was offered in terms of subscription sales or market growth since its announcement. However, app market data and analytics provider App Annie offered a lot to think about. Here are some surprising nuggets of information regarding the size of the kids app market as well as the changes subscription pricing has brought:

According to the data tracker, the global iOS kids apps market was estimated to be worth more than US$200 million last year. Apps within the Family category on the Google Play store garnered upwards of US$130 million globally in the last trailing nine months or so. (Google Play didn’t roll out its Family category until June 2015, so the dollar amount is not apples to apples.)

This will come as a surprise to many, that global sales from kids apps is not such a big market to play in after all. This might best explain how everyone interviewed for this article said selling in the kids app space is hard. Especially when you compare the size of the kids iOS and Android app market (roughly more than $330 million globally) to the sales numbers in the toy space for just VTech and LeapFrog together (collectively $880 million just between the two companies). In terms of changes related to app subscription pricing App Annie stated they don’t have specific numbers for kids subscriptions, but they could share other broad trends they see with subscriptions across other categories.

“Subscriptions have become an increasingly important type of app purchase, currently accounting for roughly 15% of all app store revenue. They have impacted a broad range of categories, including music streaming (Spotify and Pandora Radio), video streaming (Netflix and HBO NOW) and dating (Tinder). Both Apple and Google made changes in June 2016 that we believe will propel subscriptions even further. Apple’s App Store and Google Play have increased the share of revenue that publishers receive for subscriptions and iOS has opened them up to all app categories, including games.”

The year ahead, and beyond

There you have it, seven big stories to learn from, with a number of key takeaways for the year ahead. However, there’s one more observation to share, one not often mentioned in the halls of industry conferences and in business case studies. In researching this article, many executives interviewed all expressed in one way or another the desire to make a difference. One comment shared in particular best captures that pursuit. It comes from Mike Wood, the founder of LeapFrog, where he served as its first CEO from 1994 to 2004.

After Wood left LeapFrog he founded another early learning company called Smarty Ants, which he sold in 2015. Today, in an elementary school just north of San Francisco, Wood spends a few hours a day, almost every day of the week, helping young kids in grades K-2 learn how to read. Wood reflected on starting his businesses and the volunteering he is doing now. He shared the following:

“When you run a company with many passionate and smart people reaching to do the best they can for kids, it’s hard not to be attached to a company and the benefit you can bring to kids. For years at LeapFrog, as well as in my next company Smarty Ants, I would tell people ‘we’re in the goosebumps business,’ we have the opportunity to change the trajectory in many kids lives. I get to be in a very special place, I’ve been able to work alongside some smart, optimistic, cheerful kids, and I get to be there when they just start learning to read. There’s lots of goosebumps in being there when that happens. Now it’s much different in terms of gratification from running a company like LeapFrog versus working directly with a small group of kids, but you still get goosebumps either way. You get the same joy when you see kids moving forward either way. It’s emotionally powerful to be part of these things.”

Here’s wishing everyone a wonderful and successful year ahead, filled with many new ideas to grow your businesses. May your future hold plenty of goosebumps!

Scott Traylor is the founder of 360KID and a consultant to many children’s interactive businesses and products (none of which are referenced in this article, except for LeapFrog, with which Traylor worked from 2004 to 2009, Smarty Ants, and a few Co.Lab startups Scott advised but are not mentioned in this article). He’s also a former computer science teacher and currently lives in Silicon Valley, searching for the next big opportunity in the children’s industry. Scott can be reached at Scott@360KID.com.

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Cooney Study Leaves New Questions for Educational Media Creators

Monday, January 27th, 2014

[The following is an article I wrote for the Jan. 24, 2014 issue of KidScreen.]

Vicky Rideout during her survey presentation at the Cooney Center Breakthrough Learning Forum.

Media research reports are great for offering insights about an industry. They help media creators take stock in where they are today with their media creation efforts on different platforms, and they also provide ideas on how we can best serve an intended audience. At the same time, what is gained from a new study almost always leads to many more new questions that can’t immediately be answered.

That’s certainly the case with the latest Joan Ganz Cooney Center report entitled Learning at Home: Families’ Educational Media Use in America. According to Vicky Rideout, children’s media researcher and the report’s main author, this is the first time “we have tried to quantify, on a national basis, what portion of kids screen time is devoted to educational content.”

The report digs deep into parents’ thoughts on their child’s use of educational media across a number of different platforms. One big finding that will not be a big surprise to broadcasters: Television is still king when it comes to delivering educational content, even though access to alternative platforms like mobile, computers and videogames has increased greatly in recent years. Television is the preferred platform by a long shot for educational media. Granted, the television industry has also had decades more time, almost 50 years’ worth, of creating and delivering educational content to young children than its younger media platform relatives. Still, with the explosive growth of mobile, this data point begs the question if parents are aware of the educational opportunities available to them on other platforms?

Among the many insights offered, children engage with educational media less as they age. Two-to four-year-olds consume 1:16 (one hour and sixteen minutes) of educational media daily, dropping to 0:50 for five-to seven-year-olds, and further still to 0:42 for eight-to 10-year-olds. Even at this lower end for eight-to 10-year-olds, you could consider their educational media use as an added class of learning material each day. However, as a child ages they also spend more overall time consuming media, educational or not, to the point where eight to 10-year-old media usage almost doubles compared to that of two-to four-year-olds. Surprisingly, while this older group consumes less educational media content daily, their parents report seeing their child demonstration of “a particular action as a result of something they saw or did with educational media” more so than the younger age groups. This could very well be a cumulative effect of educational media use consumed over many years, but still, it’s striking data point in the research. One could strongly argue, this “particular action” is evidence of mastery of the educational content that is consumed.

Other noteworthy findings:

  • Parents see a greater perceived learning impact in the areas of cognitive skills, reading, and math from educational media use but less impact with learning science or anything related to the arts.
  • The greater a parent’s education, the less educational media is consumed.
  • The greater the family’s income, the less educational media consumed.
  • Hispanic/Latino households reports less “actions taken” from educational media use than Black or White families.

These are just a few of the many findings called out in this report. There’s also data on parent and child sharing in the educational media experience together (often referred to as “joint media engagement”) as well as findings on traditional book reading and eBook use.

With just these few items I’ve called out above, the report forces us to consider many big, unanswered questions:

  • As children grow, why do they engage less with educational media, yet consume more media at the same time? Is there a need to create more engaging educational content for this age group than what is currently being offered?
  • What is it that we’re doing wrong, or not doing at all, to better engage Hispanic/Latino families with educational media?
  • Are parents less aware of the educational offerings available through mobile, computers and video games? If so, should we get behind a national awareness campaign to make ratings and reviews websites like Common Sense Media and Children’s Technology Review better known to parents?

Perhaps the biggest question raised in this report is whether educational media use, which appears to have great benefit at an early age, leads to greater media consumption that is of less benefit to children as they age?

Michael Levine, the executive director of the Cooney Center shares this report is the beginning of a larger conversation around educational media use. “There’s a lot of interest in having children view educational media, but less fulfillment of the wish as illustrated by this report, particularly for low income and Hispanic and Latino families,” he says.

As media creators, it is imperative to understand what can be done to up our game in the educational media space, no matter what the delivery vehicle. Part of that entails informing parents about resources available to them today to help them find the best educational content broadcasters and software publishers have to offer. The Cooney Center as well as many other interested groups, foundations, and policy makers are already quickly working on the next new report, and latest research findings that will one day in the near future move the industry needle even further ahead, as well as create many more questions we’ve yet to imagine, as evidence by the volume of questions this report is sure to generate.

Additional video links:
1.) Vicky Rideout – Learning from Home report overview
2.) Michael Levine – Learning from Home report overview
3.) Playlist of all Learning from Home speakers
4.) The complete Learning from Home discussion (speakers with audience discussion)

[Scott Traylor is the CEO and founder of 360KID, a youth-focused organization that specializes in developing interactive content, apps, and games for broadcasters, publishers and organizations that wish to engage kids of any age.]

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A Conversation With Vicky Rideout

Friday, November 1st, 2013

Summarizing “Zero to Eight Children’s Media Use in America 2013″

[The following is an article I wrote for the November 2013 issue of Children’s Technology Review. A PDF copy of the article from this magazine can be downloaded here.]

A photo of Vicky Rideout from an earlier 2013 presentation

For those of us that work in children’s media, there’s nothing like finding a fresh, data filled report.

Zero to Eight Children’s Media Use in America 2013” is Vicki Rideout’s latest in a series of reports commissioned by Common Sense Media. Having followed Vicky’s work for more than a decade, I asked her for an overview of her findings.

The first key finding is this: Television and video game use is down for children compared to just two years ago. (Yes, down, not up!) In addition, overall screen media use is down compared to what was recorded just two years ago.

Television viewing in the bedroom is also down by a sizable amount. As with the television and video game drop Vicky says “I’d like to look back on these data points from a future report to see if this is a bump or a trend.” This finding does beg some additional questions that cannot be answered through the report, like has there been a drop in the number of televisions owned in the home? Has the drop in television viewing in the bedroom shifted to video viewing on a tablet in the bedroom? Vicky says it is too early to tell if this is a trend.

According to Rideout “Little drops in each platform add up to a half hour of less screen time per day on traditional screens. Then when you add in the increase in mobile use it brings that number down to 20 minutes less screen time per day. While this drop in overall screen time is significant and noteworthy, I’d like to see what the research says in another two years.”

There’s a lot of material in this report about tablet and related mobile media use. For example, two years ago only 8% of parents owned a tablet. “Today it’s 40% and children’s tablet ownership is nearly similar to that of their parents from the 2011 report. Years ago handheld video game manufacturers noted that when an older sibling purchased a new handheld gaming device, a younger sibling would ultimately receive the older device. Could the same thing be happening here with parents purchasing a new tablet and giving the children their old one? This report can’t answer that question specifically, but one thing is clear: Tablet ownership by children will increase in the years to come.

Another key trend: there is a giant shift in media use, and “the tablet is a game changer.” Vicky told me that there is “some computer use among young children, starting as early as four years of age, but because the tablet has simplified the interface so much and made things so intuitive, we see really young children successfully using this platform. If a one or two year old child can turn the pages of a board book, that same child can touch and swipe a tablet. If that child can point to an image on a board book, then that child can launch an app. As a result, a large world of content is made available to these young children. The floor for how young children use this platform has gone way down compared to other technological innovations, even compared to the Wii, which was a huge leap forward in terms of intuitive use and interface deign.”

In addition Vicky notes: “People keep saying how children are so technologically smart. We have that notion backwards. It’s the technology that’s become smart, so smart that a kid, or even a baby can use it. This change is also opening up access to content that is not just about passive video watching.

“People keep asking me ‘Is this a good thing or a bad thing?’ Unless you believe that a screen per se is a bad thing for kids no matter what, I usually respond that this is just a thing, it’s just a tablet. The good or bad about a tablet depends on the quality of the content you share with a child through this new medium.”

Vicky’s comments just begin to scratch the surface of what’s included in this new report. However, Vicky also shared she is working on a new report, focused on the same zero to eight demographic, but this time she’s writing it for the Joan Ganz Cooney Center. This report will take a deep dive into educational media, eBooks, and joint media engagement (a fancy term for parents who share in the same media experience with their child). The scheduled date of release is January 23, 2014. We look forward to reading more!

Related links:

Zero to Eight: Children’s Media Use in America 2013
Common Sense Media

VIDEO – Parenting in the Age of Digital Technology – Vicky Rideout interview (2013)
360KID

Parenting in the Age of Digital Technology (2013)
Northwestern University


VIDEO – Vicky Rideout interview – Zero to Eight Children’s Media Use Research Overview (2011)

360KID

Zero to Eight: Children’s Media Use in America (2011)
Common Sense Media

Generation M2: Media in the Lives of 8- to 18-Year-Olds (2010)
Kaiser Family Foundation


Generation M: Media in the Lives of 8-18 Yr-olds (2005)

Kaiser Family Foundation

The Effects of Electronic Media on Children Ages Zero to Six: A History of Research (2005)
Kaiser Family Foundation

Zero to Six: Electronic Media in the Lives of Infants, Toddlers and Preschoolers (2003)
Kaiser Family Foundation

Kids & Media @ The New Millennium (1999)
Kaiser Family Foundation

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Inside the World of Webkinz – An Interview With Creative Director Karl Borst

Wednesday, December 26th, 2012

[The following is an interview I shared with Children’s Technology Review in their November 2012 issue. I’ve wanted to interview someone close to Webkinz/Ganz for a very long time. The first article I wrote about Webkinz was in August 2009. After years of trying I finally connected with someone within Ganz and the rest is history (HT BL!). I’m very thankful for the opportunity, this is a very rare public look inside Ganz, and hope fans will enjoy the piece.]

Karl Borst is the Creative Director at Ganz for Webkinz and their new virtual world called Amazing World

Karl Borst is the Creative Director at Ganz for Webkinz; a position that has given him the front row on the turbulent world of children’s virtual worlds. Last week, Karl shared some insights about the past, present and future of Webkinz, including the latest 3D virtual world from Ganz called Amazing Worlds. Here are some selections of our conversation.

Scott Traylor: How long have you been working on Webkinz? Where did the idea come from?

Karl Borst: Development started in late 2003, and I joined on March 1, 2004. The original idea came from Howard Ganz himself. He loved the toys and wanted a new way to market them. Taking inspiration from Cabbage Patch Kids, he wanted to create an experience where the child “discovered” their new pet. Later we expanded this to the idea that your plush “came to life” inside the virtual world. It was very important to us that the player feel the connection between their toy and the pet online. This was where I was able to really expand the original idea. It was critical to me that the pet feel a part of the experience regardless of where you were in the world. Adding the pet’s image to the dock, along with the multiple emotional states and speech balloons may seem very obvious right now, but back in 2004 none of the pet sites had this. This was a big improvement in Webkinz.

ST: How long did it take to get the vision of Webkinz off the ground?

KB: Well it depends on where we finally got “off the ground.” In August of 2004, after a day of play testing with kids, we realized we were going in the wrong direction. Honestly, we threw out a big chunk of work that we’d done up to that date. This was a very difficult decision to make. The toys were paid for, sitting in the warehouse, and plans were well under way to release the toy that October. Going back to the drawing board meant that we’d miss the Holidays. That said, in our hearts we knew that it needed to be done, so we buckled down and got to it. We ended up launching in April 2005, and it was a tough first few months. Retailers didn’t understand the product. They didn’t get how the world and the toy related. We even made a video that explained the product and gave the retailers televisions to show it on. All the while we were adding features and content to the site. The amount of work we did in 2005 is mind blowing. Realize we weren’t even in the top 100,000 sites at the end of 2005. Yet in 2006 we started to see real momentum. Christmas had given us a lift and then Easter, and the players were coming in at a faster and faster rate. Then in 2007 we exploded, and by the end of that year we were a top 100 site, and the number four Google searched term. If there was anything that I could tell companies that are considering building a virtual world, it would be you need to have patience. None of the virtual worlds have exploded out of the gate – not Webkinz, not Neopets, not Wizard 101, not even Club Penguin. You need to commit to the project and invest in making it better until you’ve got the perfect world for your audience.

Screen capture of the Webkinz sign in page from April 2007.

Screen capture of the Webkinz sign in page from April 2007.

ST: What do you look for when testing with children?

KB: We try to focus on what the child is doing, not what they are saying. You can really learn a lot from the actions a child is taking, or more often not taking. When you ask questions you find that kids have a hard time describing what they did or why they did it, and many times they really want to please you and aren’t as harsh as you really need them to be. When you see them fail at an action, or skip over a feature you thought was key, it speaks volumes.

ST: How did you shape the online experience over time? What guided your thinking?

KB: I’m sure this is where I’m supposed to say that we closely analyzed user trends and data, but to be honest we didn’t. A lot of the time we went with our guts and with what we were hearing from the players. First we knew that we wanted to make the world as interactive as possible. We wanted every object that looked like it was functional to actually be functional. I honestly think this direction has made the Webkinz room engine the best on the market. We also knew we just needed “more”. More games, more items, more stuff to do. Kids love telling you what they want, so you end up with more information that you could ever really use. The real challenge is taking all of that information and finding the gems to follow through with. Then turning those ideas into features that kids actually want to play. We weren’t 100% successful in this, but we had some real hits, like the Employment Office and the Chef Challenge.

ST: How has Webkinz changed over time?

KB: Adding more and more makes things complicated. Webkinz is much, much larger now than when we started. Tons of sections, thousands of items, dozens of games, multi-player areas… When we started it was so simple. Players could jump in and figure it out. Now we need to help players through the initial few plays so that they don’t get overwhelmed by the options. There comes a point where adding new features doesn’t improve your game. Now we’re focusing on refining our features, and using those features to create engaging events on a regular basis.

ST: Do you see differences in how kids from different countries use Webkinz?

KB: Actually, we don’t. I think that we’re tapping into some universal ideas of play and imagination. The core activities for all of our players are play games in the Arcade, do their daily activities and then play with their pets in their virtual rooms. While we’ve added dozens of features since the launch of the game, these core features which we’ve had since day one still resonate the best.

ST: Ganz has a number of virtual worlds now, can you share a little about each?

KB: We have four. First of course is Webkinz, which has been running strong for seven and half years now. Next is Webkinz Jr. It was designed as a truly pre-school virtual world. It’s highly educational, and requires no reading. While it did not see the success that Webkinz did, parents of children who play absolutely love the site. This year we released two more virtual worlds. In Amazing World you play a “Zing,” helping out the characters you meet, shooing away the nasty Nix, and working together to make the world more amazing. Finally, we’re currently in Beta with another new virtual world called Nakamas. This world has been specifically designed for girls ages 5-11 who love making friendship bracelets and hanging with friends.

ST: How long has Amazing World been in development?

KB: While I can’t say exactly how long we’ve been working on it, the development time was similar to Webkinz. Again we went through a number of iterations. Sometimes building a game takes on a life of its own. Many of the features that are now in the game, like the Nix, were added very late in development. And we’re still improving the game. We haven’t been happy about the interiors of the homes for some time now, so we’re working on making them much cooler – really taking them in a new direction.

ST: What did you do differently in building Amazing World from that of Webkinz? Are there any similarities?

KB: From the very start of the development of Amazing World, I wanted to build a virtual world that complimented Webkinz. I wanted players to have a very different experience in AW than in Webkinz. This is why you don’t “take care” of your Zing, and it isn’t a “pet”. The player should be able to play Webkinz for half an hour, then jump over to Amazing World and never feel that they’re duplicating effort. The other obvious difference was that the game was working with Unity3D to create a world that you can really live in. This meant that we wanted our games and activities to feel part of that world, and not independent sections. The fact that there is no “arcade” was a conscious decision. It also allowed us to do much more with the Zing’s room. Now the home and the yard provide greater freedom of design, without the restriction of a “grid.” This freedom comes at the cost of some more complexity but I think we’ve done a good job of balancing this out.

Screen capture of the new Ganz virtual world for kids called Amazing World

Screen capture of Amazing World. (Click image to see larger version.)

ST: What are you hoping for with Amazing World?

KB: Naturally we’re hoping that Amazing World captures the imaginations of kids, like Webkinz. While we’ve all seen many toy-connected virtual worlds come and go, Amazing World has the potential to revitalize this space, and most importantly, Ganz is committed to making this world great. Most people don’t remember that when Webkinz was launched that it was quite small, but was teeming with potential. With a dedicated team, we were able to refine, expand and improve the game into what it is today. We have a team that is just as dedicated to Amazing World and I am confident that players who get into Amazing World will stay on board for a very wild and exciting ride.

ST: How challenging is it to manage the needs of a toy product with that of a related virtual world?

KB: Ganz started out as a toy company, so when it comes to creating the products themselves, we’ve got a great system. The challenge comes with creating unique, engaging online play for specific products under a single brand. If you look at any popular toy line, take Polly Pocket as an example, you’ve got small $5 figure packs and large houses for $50 with multiple figures, and special packs with animals, etc. When those are the toys by themselves, the value is right before your eyes and you either like what you’re about to open or not. When you have a connected virtual world, you have to make a decision. What does each item give you? What should a $50 toy get compared to a $5 toy? Despite the fact that the customer can see the value of the $50 toy, there is still an assumption that the online play value will be greater than a $5 toy. Do I think that we nailed it with Webkinz every time? No. We had some real knock out successes with our ancillary products and some real flubs. It was bound to happen as we felt out this uncharted territory. That said, what we did perfectly well was the initial toy purchase itself. The value that we give with a single Webkinz plush toy is exceptional, and has clearly driven our thinking for our new sites.

ST: What do you think of the virtual world space today? How about the toy industry? Any thoughts on where you see either industry going?

KB: Overall I feel that virtual worlds have an inherent challenge to their definition. Virtual Worlds aren’t MMOs in the classic sense, though they have many of the social, multi-player experiences that make MMOs great. They also aren’t game depots, like Miniclip, but are expected to have many, quick-play games to engage players while they work up the virtual currency to expand their homes and dress their avatars. Finally, they aren’t “games” per se. They need to be a sandbox of interactive systems that allow the players to choose the experience that they wish to make, while remaining a cohesive world that isn’t confusing to a new player. It is important to integrate casual games into the world experience itself, making social interaction and cooperation a core part of the player’s day-to-day activities and bringing the player more fully into the world through story and guided play. The future of virtual worlds — including Amazing World — is in bringing these components closer together.

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Duck Duck Moose Gets a Golden Egg

Wednesday, September 26th, 2012

[Note: this is an excerpt from the upcoming October 2012 issue of Children’s Technology Review.].

Children's app developer Duck Duck Moose

When it comes to apps that actively engage young children, one of the companies with products on every list is Duck Duck Moose Design. This three person studio — funny name and all – was one of the first to the children’s app scene, with an app called Wheels on the Bus.

Duck Duck Moose is a three person start-up based in San Mateo, CA. It launched it’s first app in 2009; today there are 14 DDM titles, collectively accounting for about 2.4 million paid downloads (publisher numbers).

On September 26, 2012, Duck Duck Moose announced it will be changing and expanding it’s business, with a $7 million investment from Lightspeed Venture Partners, Sequoia Capital and Stanford University. This type of investment raises questions that every small publisher hopes to deal with. “What do we do with lots of money?” “Is it possible to grow in a smart way, and keep the focus on quality?” And more importantly, “is this type of investment, and the constraints that come with it, a blessing or a curse?”

Of course, only time will tell. But we can say one thing for sure — Duck Duck Moose Design is once again charting new ground, as one of the first small mom-and-pop app publishers to get a big investment. Many other small children’s app publishers will be watching from the sidelines with great interest to see how this cash infusion will affect their work.

Children's app developer Duck Duck Moose
(Duck Duck Moose Founders Nicci Grabiel, Caroline Hu Flexer, and Michael Flexer)

A full interview with DDM co-founder Caroline Hu Flexer will appear in the October issue of Children’s Technology Review. In anticipation of that issue’s release, here are a few questions from the full interview to come.

Scott Traylor: Tell me about the first app you developed.

Caroline Hu Flexer: As a hobby, we started designing the Wheels on the Bus app for our own child. My husband Michael, and our good friend Nicci Gabriel worked on developing the app part-time over a three month period. We all had other full-time jobs. We launched that app in 2009. Later that year we won a KAPi Award, our first children’s industry award, and that was the beginning. That’s when we realized that maybe this could become a business. Wheels on the Bus continues to sell three-and-a-half years after it’s launch, and it’s still in the top charts. It wasn’t until 2010 that Nicci and I started working full-time. Michael started full time in 2011. It was just the three of us up until early this year. Recently our good friend, Jesse Ambrose, a founding engineer at Siebel Systems with my husband Michael, joined our team full-time. The four of us basically created the first 11 titles. Today we’re a team of nine, including the three founders.

ST: How has your thinking changed about developing apps for kids since you started?

CHF: The core of it hasn’t changed. We’ve always put kids at the center of what we do, but we’re always learning different things with each app and with different ages we may be targeting. We’ve done a lot of different types of apps. We started with toddler apps, like The Wheels on the Bus, which had one or two things for a young child to focus on. We didn’t want our apps to be over-stimulating, to have too many things going on at the same time. From a developmental perspective, we wanted our apps for toddlers to have simple interactions, whereas as we develop for older children, our apps have been more open-ended and have evolved into more layered interactions. One example for older children is our Draw and Tell app, where children make their own drawings, record their own voices, and create their own story. It’s a very different approach to the interaction.

ST: While there are many more big companies with big brands going into the children’s app business, would you say big business has seen big success from those efforts?

CHF: There have been some successes. It’s still rare to find interesting new content. There are a lot of big children’s media companies that have good apps and include characters that really appeal to children, but I think it’s a very unique time where we can invent new experiences using new characters because it’s a new platform. We’re able to do something really creative, and I think that’s a pretty rare opportunity. There are not that many companies creating their own original story lines and characters. It’s much more fun to invent something new, and it’s a better business model for us too.

The first children's app from Duck Duck Moose called Wheels on the Bus
(The first children’s app from Duck Duck Moose called Wheels on the Bus)

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