A bonus episode timed ahead of Netflix's earnings call, with Andy and Jo putting questions to Emily as she and her team prep the next Netflix Kids Content Performance Report. The conversation starts with the Warner deal Netflix walked away from, and what that decision — clinical, unmathematical, uncharacteristically restrained — reveals about where Netflix thinks its gaps actually are.

From there it's into the data: second seasons not landing as hard, the hit-making machine feeling slightly less reliable, and the structural tension between binge-model engagement and the habit-forming retention Netflix is now chasing. Kids content, Emily argues, is central to solving that problem — it's the most habitually consumed content on any platform — which makes Netflix's growing investment in the space (YouTube creator acquisitions, the Playground gaming app, no ads on kids profiles even on the ad tier) start to look less opportunistic and more strategic.

The harder question the episode lands on is whether Netflix is actually in the business of building IP, or just exceptionally good at acquiring other people's. K-Pop Demon Hunters was lightning in a bottle — brilliant, defining, not a strategy. Emily's view is that Netflix's note is aggregation, not origination, and the Warner pursuit was less about content ambition and more about filling a catalogue gap they can't otherwise close.

Takeaways:

• In this episode, we discussed the implications of Netflix's recent data drop on children's content and engagement metrics.
• We examined how Netflix's shift from subscriber growth to engagement metrics reflects a significant corporate strategy adjustment.
• The discussion highlighted the challenges Netflix faces with second seasons not performing as strongly as expected, raising concerns about content sustainability.
• We noted the increasing competition among children's programming, particularly how established properties like Ms. Rachel are reshaping engagement on the platform.
• The podcast emphasized Netflix's strategic positioning as a safe alternative to YouTube for children's content, focusing on curated and ad-free viewing experiences.
• We explored the significance of Netflix's kids app and gaming offerings in enhancing viewer retention and engagement for younger audiences.

Links referenced in this episode:

• kidsmediaclub.substack.com
• youtube.com

Hello, everyone.

I'm Addie Williams and this is a very special episode of the Kids Media Club podcast.

Yay.

It's time to noodle on Netflix.

This is, this is one of my favorite episodes and times of the year because I get to write down a list of questions and throw them.

Emily.

So I can delve around inside her brain.

Emily, tell us what you've been up to.

Oh, thanks, guys.

Yes, it is tis the season for Netflix earnings and it is the season for the next Netflix data drop or data dump.

So, yeah, I'm in high gear with the team looking at what that next round of data is going to tell us.

We've obviously, we run the Netflix kids content performance reports for our clients and we've been tracking lots of stories up till now.

If you kind of remember that the last Netflix earnings was not, or, sorry, not the, the last data drop after the last day drop, there was this whole pivot basically to that the Netflix lost out on WarnerMedia, that Warner deal.

So that was a.

We were in the middle of writing last, the last report and that happened.

So the landscape's kind of settled a bit since then.

But I think there's questions that are emerging definitely about Netflix, about, you know, what might the reason have been that they were buying Warner.

People are saying, obviously it's that, you know, bedazzled crown jewels of, of ip, you know, and they were pursuing it at a very high value.

So that was, you know, that was a big swing for them.

I mean, they, they walked away from the deal.

I think, you know, that was, it seemed to be a very measured thing for them to do, you know, you know what I mean?

It was like clinical, clinical.

Didn't the math.

Didn't math and they didn't get overexcited and run down the road.

But there is this kind of question of like, if you were really, really willing to pay that much for that type of asset, you know, what are you missing?

Yeah.

And for the uninitiated and before we get into the kids, specific insights that you dive into, what does the tell us essentially what the data dump is for the uninitiated and also what has been the story so far.

And with that lens of them walking away from Warner, what might it tell us?

Yeah, sorry, I'm straight at the races, guys, because this is like what I live in my brain and I forget that people doesn't.

This isn't everyone else's brain.

Rent free.

Yeah.

So Netflix are, you know, the premium one to catch the, the premier.

The premier Position, pole position in the premium streaming wars.

Okay, YouTube aside, as not a premium streamer, Netflix as is pole position, the premium streaming wars, because it was out the gate first.

It has, you know, hundreds of hundreds of millions of subscribers worldwide.

Disney set to catch Netflix, you know, HBO Max set to catch Netflix.

Paramount plus set to catch Netflix.

And given it is so penetrated and it is so saturated, Netflix kind of had pushed the narrative, the corporate narrative of subscriber growth, subscriber growth, subscriber growth.

But when they got, you know, they hit over 300 million subscribers globally, it was kind of.

That's a harder narrative for them to sustain because there's just that saturation.

So they changed the story whiplashed under the industry to refocus the corporate storytelling around engagement.

So one part of that is they drop around 15,000 or more lines of data every six months to show what content is doing well for them.

And that also by nature of that they called the yardstick by which engagement is being you know, assessed by which is hours viewed, which will always naturally, you know, if any other streamer, if Disney plus or whatever opted to go down the same route, would always find it difficult to catch Netflix on hours viewed because they've got more subscribers.

The more subscribers you have, the more your content that is being watched.

So the hours view naturally goes up.

So yeah, they drop this, this massive batch of data twice a year and it's, you know, anyone can pick it up.

It's publicly available.

It's great crack.

Well, so I think that's kind of fun thing if you want to do.

If you want to do back of a backpack.

Yes, if it wasn't too back of a backpack of calculations, you know, you can look at, you know, what did Wednesday do?

What did, you know, what did this movie do?

That movie do.

But the thing about big drainings of data like this is to on top of it, you need to look at it with consistency and you need to look at it with a, with a tool or a database, which is what myself and the team have built a proprietary database of kids content that we editorially categorize to be able to say, listen, this is.

This is what it's looking like for preschool.

This is what it's looking like for comedy animation, this is what it's looking like for fantasy animation, and this is what it's looking like for movies.

So, yeah, the stories, you know, like, there's massive flexes.

Netflix has been able to make massive flexes with this, with this, you know, narrative strategy there, you know, Things like Wednesday, they also, they also obviously release, they release their top weekly top tens as well.

Like being able to tell the story of how good content is doing and how much engagement it's driving has really been.

Yeah, it's ultimately been a really good strategy for their corporate storytelling, but it dulls the problem.

With great, kind of, with great transparency comes great accountability because, you know, if you're able to look, anyone can look at the data and you can put together a picture that might not be so positive or might not be so complimentary at times.

And the big one that I've heard from this latest batch of data is about second season.

So there's kind of, there's some data that emerging from that that ends up presenting some challenges for Netflix.

Yeah, yeah.

So second seasons are not coming back as strong.

It feels like there's been a couple of, you know, some of those IP duels that Netflix have, you know, mined themselves.

They've had less of those real cultural cut through moments, say in the last six months than they've had before.

And obviously Stranger Things is finished.

You know, something like you think of adolescence and last year was a limited series, K Pop Demon Hunters is obviously huge, but that was, you know, one moment in time.

So, you know, there's, you know, you're able to track the data and people can see that the hits aren't hitting as hard as they hit before.

And that's not great.

When Netflix is talking about, you know, engagement being the core metric and also when they've lost out, right, to bring it back to what we were talking about at the top at the start, like to bring it back to that warning thing.

They lost out on that massive treasure trove of assets.

So,.

You know, I think it's interesting, isn't it?

It's kind of, it, it feels to me as somebody that isn't kind of steeped in a lot of that data, it feels like they switched from that subscriber metrics to an engagement metrics.

But the engagement metrics also froze up its own specific challenges, which I think maybe people initially outside of Netflix thought the engagement metrics was easier, but it also froze up quite a lot of challenges as well, to be judged on that.

Well, it, it, I wonder if it's a function of the binge watching that behaviors that Netflix really pioneered because that was specifically designed to bring in subscribers.

You, you absolutely had to be a subscriber for when that hit, you know, whatever it was.

Squid games, bridgeton.

But then there was that churn.

And as they reach saturation in that addressable market.

They've moved to this engagement model.

But actually engagement is a bit of a red herring in the sense that it's a retention issue now in the sense that they are, they have got such great content that gets the hours viewed, but when there's an 18 month, two year gap between seasons, that interest wanes.

So it's actually a retention.

The engagement's okay.

But actually re.

Engaging is a, is a bit of an issue.

Yeah, yeah.

And listen, it was something we've been talking about, Joe, about quantity versus quality.

And.

But the thing about, right, the thing about the thing that engagement and retention, where the, where they both intersect is habit, right?

And that's the key thing, right?

That's what, that, that's what Netflix is trying to push, right?

Like it wants to be something.

It wants to be a service that you pick up habitually every day, every, you know, maybe multiple times a day.

And that's where they're going with things like their podcast strategy.

Right?

Like they want to be.

They kind of.

They've nailed feature tv, right?

They've nailed, they've nailed, you know, marquee entertainment series.

Okay.

Even if they haven't had a great one in the last six months.

I don't think anyone's kind of saying that they're.

That, you know, that that's not something that the competency that they have variably demonstrated, you know, again and again and again.

But it's trying to find those moments where it's.

That return, you know, that, that, that habitual user.

And you're right, like that the binge model doesn't lean towards that habitual user.

It leans towards moments.

But I will say that that's also where kids content comes massively into it because kids content, you know, is like if your kids are, if your kids are using a series, you know, they're watching, you know, they might be watching a bit of TV before they get, you know, in the morning, before they go to school, they might be watching a little bit of TV when they get home from school and then you might be watching a movie, you know, at the weekend.

Right.

Like kids content is habit forming content.

It's the very essence of habitual, isn't it?

Yeah, exactly.

Yeah, yeah.

They're the most habitual watches.

Yeah, yeah.

And also the kind of, you know, they have a lot of.

They have more free time to watch TV on the whole.

Yeah, well, they have busy.

They're busy little things.

But yeah, it, they.

That, that sort of the routineness of childhood.

Right.

Like is, you know, lends itself to this, to, to that, you know, returning to a service and that kind of thing.

So, and, and is this the reason that we're also seeing YouTube begin to.

Netflix begin to pick up YouTube YouTubers YouTube content again?

Because we talk about kids being habitual viewers, but their favorite platform for habit.

Is YouTube 100 streaming wars are over.

YouTube has won.

I think I heard somebody write that once.

Yeah, I mean I think that's.

That definitely feels like that YouTube relationship with the audience.

I wonder sometimes whether Netflix is almost in the position of as a platform wanting to acquire that relationship as well as that content.

The kids creator content on Netflix.

Kids YouTube content on Netflix is one of the major trends that we've been tracking in the Netflix report since we started.

It started with Cocomelon, which was absolutely monstrous for many years and is still quite big.

For a kids series.

Right.

Like we thought we, you know, we've been doing the report for probably two years and we thought we had, we'd figured out what, you know, good, very good and excellent looked like.

And then Ms. Rachel came in and just blew it out of the water a bit like K Pop Demon Hunters.

It's still not the bar that you should be judging yourself against, you know, Ms. Rachel or K Pop Demon Hunters, because they're just unreal.

But yeah, that creator, that creator pipeline is, is massive and it is a big part of that habitual piece for sure.

And there is another really interesting thing Netflix are doing specifically around kids content though as well.

It's like the positioning themselves as a safe alternative to YouTube.

Right.

So yes, your kids might love Danny Go, they might love Ms. Rachel, they might love Mark Rober, Salish and Jordan Matter, but they can come.

You could, you can have them on Netflix watching that stuff.

You're not going to get hit with adverts.

You're not.

Your kids aren't going to go down a rabbit hole, like a dark rabbit hole of the Internet on Netflix.

There's not going to be a dodgy recommended video that autoplays straight after.

No.

Or AI slop or whatever.

Right.

Like it's going to be, it's going to be.

They're safe and they really are positioning them like they're, they're actively, you can see that in their comms.

We want to be a place where parents can feel good about putting their kids is the line that they use.

And it's It's a great one.

Right?

Like, it's clever.

Yeah.

It just.

But it's.

And it's.

That's helpful, you know what I mean?

Like, I'm like, obviously, like, yes, corporate cynicism, but like it's a.

That's a helpful.

That's solving a problem for parents.

You know what I mean?

Yeah, absolutely.

But.

But it is slightly muddied.

That communication line is slightly muddied if you're taking the view of, you know, you can judge by the words of a company, but you also judge through the actions of a company and the fact that so much of the kids content originated on YouTube.

So, so that, so that's an interesting tension there between the fact that.

That you're showcasing an advertising content that originated on YouTube and will still such.

A good point, isn't it?

Viewers on YouTube.

So there's.

Yeah, there's an interesting kind of sort of.

They want the cake and eat it, don't they, Andy?

Yeah, I always thought that was a strange expression because who.

Who doesn't want to have their cake and eat it?

They don't want to have to invest in creating.

I don't.

I don't want to buy free cake.

They want.

Again, who.

Who doesn't want free cake?

You know?

Yeah, no, it is, it's like.

And, and that's maybe the thing, the one frustration that I would level at Netflix is that, like, are they in it to build their own ip?

I don't think so.

Right.

Even with K Pop Demon Hunters being a runaway success.

And it will be the defining chills children's IP of the decade, in my opinion, you know, that would.

That, that was a fluke.

That was a fluke that you're not, you know what I mean?

You cashed in at the, at the casino and like, obviously you're gonna go and.

And cash out.

Right?

Like, you know, when you hit big.

But I don't think that was intentional and I don't see their.

Them orientating a strategy around that.

You know what I mean?

So farming in other ip.

But be it Pepper, which was huge.

Paw Patrol or SpongeBob or Ms. Rachel or Mark Rober.

Right?

Like, that's.

That's kind of, that's kind of their.

That's their note.

It's tricky, isn't it, for companies when.

Because it's a bit like you pull the handle on a fruit machine and then you suddenly hit the jackpot and there's, you know, you, there's loads of.

Loads of success that comes out of that but, but it's difficult to strap.

Build a strategy around something that is, that feels like it's a kind of a pull on the arm of a fruit machine.

I think Nickelodeon had that issue a little bit with spongebob.

Is that spongebob was one of those flukes that they really desperately tried to replicate and do another spongebob.

But, but the, but the dynamics and the conditions that allowed them to create spongebob in the first place was quite difficult to replicate.

And, and I think something like K Pop Demon Hunters is a little bit of that kind of genie in a bottle, really.

That's hard to replicate and build a strategy around to some extent.

Yeah.

But I will say this.

It doesn't necessarily feel like there's even an infrastructure around it in a major way.

Right.

And that's like, you know, that's the difference.

Like, yes, hitting the jackpot is the game we're all playing working in entertainment.

Right.

Like, you know, and you need to have misses to have hits, which seems to be the part that people forget about.

But it's when you have the infrastructure to activate around those hits.

You know, unless Netflix are pulling lots out of the bag for K Pop Demon Hunters, definitely it's, it's been impressive that how they've been able to mobilize around it.

But like, it's not that I just don't see them being in the business of, you know, being in the business of that infrastructure.

You know what I mean?

And maybe they look, yeah, it'll.

It'll eke out into other.

The adult stuff and that kind of thing.

There have been.

They're so streaming centric, so streaming focused that, you know, consumer products is like the marketing, you know, as.

It's why they wanted Warner Brothers for their ip.

Right.

Yeah, true.

I, I didn't, I really didn't like the idea of that acquisition.

I was just like, I, you know, one of the most interesting things about Netflix is that they have this really specific skin in the game.

And I think if they bought Warner, they would have just been another entertainment company personally, which would have made my life duller because I bet I just didn't think it would be as, you know, they just end up like, because it's such like, I know from my time at Disney and stuff like that when, when you swallow such a big entity, like, you know, there's no way the culture changes.

The culture, like the culture adapts to be like around that too, so.

And not only often you get kind of corporate indigestion from corporate Indigestion.

That's a good one, Andy.

But you know what I mean, it's kind of like.

Yeah, yeah.

It ends up becoming something that you haven't quite kind of factored into what you've kind of bitten off really.

I do wonder if actually the.

The beneficiary of them not taking in part the Warner Brothers deal or not going through with it is the gaming side of things, which in the last six months has really been pushed to the fore for kids.

And it comes back to your point, Emily, about you don't have to feel guilty as parents for sticking your kids in front of Netflix and then watching lots of kids content, because even though some of it's come from YouTube, it's here, it's curated, it's playlisted.

Oh, and by the way, we've got this great kids app gaming offering now again, which is there.

It's safe, it's giving.

Another thing to do.

It's no free.

Yeah, yeah, yeah, yeah.

Netflix Playground up that launched in April.

Yeah.

And it's, I mean, it's very young.

It's very young.

Skewing, I would say.

It's like, you know, they have.

They brought K Pop Demon Hunters into it now.

And obviously K Pop Hunters is a bit older, but it's still, it's, you know, the, the juiciest thing on it is an endless runner.

You know what I mean?

And a little dance game.

Like, it's matching, it's tracing, it's doing jigsaw bits.

Yeah.

Which is sweet and cute and appropriate and it's rich.

It's got a number of IP on there, but yeah, it all expands to this idea of being the safe alternative to YouTube.

The more notable thing I think Netflix do, from a kid's record point of view is that don't serve ads on kids content, even if you're an ad tier.

You know what I mean?

So that, like, that as an alternative to YouTube, as a parent is definitely.

Yeah, that's very.

Because the worst thing on YouTube is the ads.

Or like, you know, you end up with like, Mike has been served like horror movie ads.

You know what I mean?

Like, yeah, yeah, that's very powerful, I think as a.

This, as a distinguishing point between what they provide and what you can find on YouTube.

Yeah, yeah, definitely.

But it is, it's.

Yeah, it's.

It's.

Yeah.

You get the sense that Netflix is taking kids content more seriously because you, you mentioned about just the percentage of the audience that the, the percentage of the audience that is kids is Quite a large percentage.

They have.

They have released a couple of stats on.

On it.

So it's a.

Recently I do think it's becoming more.

I do think they're.

I do think they're crystallizing on it a bit.

They.

Recently they released a start around Annecy of 22% of all views on Netflix come from kids Kids and family content.

22%.

That's.

That's a lot like that's, you know, that's significant.

Then we don't know what the constitutes kids and family content.

That.

That could be wwe, which I used to watch as a kid.

Right.

Like it could be, you know, I don't know if they go as far as saying like some of the.

The rest is football stuff, you know, like.

Because kids will watch that too, right?

Or like it's family stuff.

You know, it does become family viewing.

But still I think the fact that they're publicizing around it means that they're taking it seriously.

Obviously K Pop Demon Hunters, you know, will naturally have them taking it more seriously.

And that's something they've wanted for many years is to get an animated movie that was super strong.

And they actually, they're having some not bad form on animated movies overall.

They've gone from like they'd had a good.

And since then they haven't had a major hit until K Pop Demon Hunters which was like lightning in a bottle.

Like, you know, that's not a strategy.

But then actually swapped their latest animated movie has done back to.

Back to solid form again, not, you know, not K Pop Demon Hunters but like that's very unique Lightning in a Bottle moment.

Right?

It's done.

It's done well.

And they have stepped coming out later this year which is an alternative take on Cinderella's story with the.

With the Ugly Sisters actually as the misunderstood protagonists.

It's kind of like the Cruella.

Yeah, yeah.

You play the antagonist to make them kind of the.

Yeah.

And I think it's gonna be.

It's gonna be musicals, right?

Because it's got like it's.

It's Samantha Sea Free.

Another Tony Award winners, Grammy Award winners.

Like so if they get that like it's kind of.

I was kind of find like threes, you know, trees, a pipeline that's working.

You know what I mean?

If you've got Kpop, do you want to see you got swapped.

And then once you have a third then you're kind of you're kind of shown that this is actually a strategy that's working rather than, you know, a couple of.

A couple of one off.

So, yeah, let's see how that, that step movie isn't it until November.

It's, it's hitting that like, really high.

Like the high profile moment of Thanksgiving into Christmas.

So we'll see how that, how that pans out.

But yeah, that's.

Those are kind of the key things we're looking at.

The creator stuff, the animated movies, and then just how competitive it is for kids content on Netflix.

Like, all of the top, the top properties are slugging it out.

Like Gabby's Dollhouse, Pepper, Paw Patrol, Mash and the Bear.

Like, you know, Ms. Rachel coming into the mix.

We don't know what Danny Go will do.

Like, and all of these properties are all like, at it.

Right.

Like, they're either releasing new series or they're trying new Windows or they're, you know, you know, they're releasing movies.

Right.

Like, they're all throwing everything at being on top, which makes it, which makes it fun.

Yeah, I know.

There any.

Are there any surprises around that in terms of people doing better than you thought they would be doing or not as well?

The biggest one was Ms. Rachel, the strength of Ms. Rachel coming in last year.

And so we'll see if Danigo, my models are saying Danny Go won't be at that level, you know, but we'll be very.

We'll be strong, but not at that level.

So, yeah, we'll see.

We'll see how that all.

Yeah, it was Ms. Rachel coming in, so we'll see how that.

That happens.

Obviously, Coco Melon Engagement as well on Netflix has been in decline too.

So we'll see.

You know, does something come in to fill that gap?

Little angels kind of been bubbling around.

Yeah, it's, it's just, it's competitive, which makes it exciting.

Yeah.

Are there any, are there any rumors of any new IP from YouTube?

They're sniffing around or is that something that you don't.

I haven't heard of anything, but I have heard that there may be, you know, specific remit being given on that.

But I don't want to talk.

I don't want to tell you what, I'm here.

I'll put it in the group chat.

So.

But no, it's really working.

I mean, like, again, it's like once you get three hits.

Right.

And then you've got a strategy happening.

Right.

So we've had Ms. Rachel, we've had Mark Rober, Dani go.

Launched seems to be strong again.

We can see it.

Salish and Jordan matter, you know, launched and again seems to be it.

So like it.

That feels like a strategy that's living and working a bit.

Like with gaming, you can see that they're, you know, they kind of reorientated their gaming arm around different pillars, kids being kids and family being one of them.

And then they brought out the playground app and they've continued to update that.

Like it's where you're seeing continued work and investment that you go, okay, right, that's, that's, that's a strategy that's been pursued.

Yeah.

I was tempted to let the listeners know that there's no plans to add a subscription fee to the group chat.

Not yet.

We should start posting more on the Substack chat, though, for folks who are following us on Substack because articles and stuff.

Yes, and don't forget to subscribe to the Kids Media Club podcast newsletter on Substack now, in case you ever don't get the chance to listen to us on a weekly basis, then we provide a handy digest and summary of each week's episode on Substack.

And yes, absolutely.

And while we're blogging stuff, we could always do with more subscribers to our YouTube channel as well.

Awesome.

Well, listen, thanks for, thanks for letting me blabber on about it.

So earnings call on Thursday this week.

Yes, my newsletter will be.

Well, sorry, I should plug another newsletter.

I'll, I'll, I've.

Yeah, I'll have thoughts on my newsletter.

The next day is Thursday is going to be a late one.

Thursday, that earnings call is always a late one.

So if anyone's buzzing around the Internet wants to ping me, abstract me, I'll be at it all all night Thursday UK time.

So fabulous.

Cool.

Good stuff.

So should I do a quick sign off?

Do it.

So, yeah, hope you enjoyed that chat and please follow us like and subscribe us on YouTube substack.

Tick tock.

Yes, Tick tock.

And wherever you get your podcasts.

And we won't see you next week because this is coming out on Wednesday.

So we'll see you tomorrow.

You can't get rid of us.

Anyway, we'll see you later.

Thanks.

Bye.

But.