Name: Inside the Company Minting the Next Generation of Child Stars
Uploaded: 2023-09-28T18:50:00Z
Duration: 6 min 8 s
Description: Pocket.watch, a digital-media company in Culver City, Calif., wants to be ‘the Nickelodeon of the future,’ its CEO says. WSJ’s Chavie Lieber explains how the company identifies and then signs YouTube’s biggest kid creators and then works to create new shows and distribution deals with streaming giants. Zoe Thomas hosts. Photo: Pat Martin for WSJ Magazine

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Pocket.watch, a digital-media company in Culver City, Calif., wants to be ‘the Nickelodeon of the future,’ its CEO says. WSJ’s Chavie Lieber explains how the company identifies and then signs YouTube’s biggest kid creators and then works to create new shows and distribution deals with streaming giants. Zoe Thomas hosts. Photo: Pat Martin for WSJ Magazine

https://m.wsj.net/video/20230928/f81aa8b5-2990-4770-bb68-89332605f476/1/hls/manifest-hd-wifi.m3u8

Inside the Company Minting the Next Generation of Child Stars

Zoe: Welcome to "Tech News Briefing." It's Thursday, September 28th. I'm Zoe Thomas for the Wall Street Journal. In the past, Disney and Nickelodeon once held child audiences captive, but YouTube is where children go now. According to research agency Giraffe Insights, 86% of US kids rank YouTube as their top choice for consuming video content. That's created a big opportunity for companies like Pocket Watch, a digital media company turning kid creators into million dollar franchises. Our reporter, Chavie Lieber, got an inside look at the company and she joins us now. So Chavie, tell us a bit about Pocket Watch's strategy.

Chavie: So Pocket Watch is an entertainment studio that identifies and then signs YouTube's biggest kid creators. So it's either families who are performing silly baking challenges, to actual kid YouTubers who are playing dress up and rolling Play-Doh. And the idea is to turn them into these big franchises. So they will repackage and distribute their YouTube libraries to giants like Hulu or Roku. They also create original shows for them and they will then distribute these shows to Hulu or Roku, or even Pocket Watch has their own channels. And then for top talent, there is a pipeline to consumer products like bedding, pajamas, dolls, there's even toothpaste.

Zoe: Are there any stars we might be familiar with?

Chavie: The best example that I can think of, that I think most people probably are familiar with, is Ryan Kaji, who is 11 years old and he is one of YouTube's highest earners. Ryan became famous at the age of three and everyone probably, who knows his name, knows him for toy unboxing videos. So he was one of Pocket Watch's first stars that they signed, and the company in the years that they worked with him has made tons of programming about Ryan, everything from animated shows to a show that even streamed on Nickelodeon. And now they're working on this big movie that's coming out next fall.

Zoe: You mentioned Ryan and his success. I mean, how successful has Pocket Watch been overall with the number of stars it's turned into these big franchises and brands?

Chavie: So since Pocket Watch was founded six years ago it has signed 47 creators, and they told me that they have pulled in $185 million in revenue over the last six years, and they've sold about $1 billion dollars worth of retail products. I should note that the company did not share whether or not it was profitable. Chris Williams, the CEO of Pocket Watch, he told me that some of their creators will do seven figures a year just in distribution deals. And then for consumer products, he mentioned you can make 30 million to $100 million annually in royalty if you are a top talent working with Pocket Watch.

Zoe: Chavie, you also spoke to some of Pocket Watch's stars, its clients. Can you tell us about your conversations with them?

Chavie: So, one family that I met with out in California, in Orange County, is the Wallace family. They are a family of four, it's a mother and a father, and their YouTube channel centers around Stella, their eight year old daughter, and with appearances by their 10 year old son Jameson. And the channel is called "The Stella Show." Their YouTube channel started out more casually and now the channels all has videos about Stella confronting bullies, Stella cooking something in the kitchen, Stella learning how to share. And when they signed with Pocket Watch, they told me that they sold their back catalog on YouTube for about $400,000. And YouTube is still their bread and butter, but they make about $5,000 a month from distribution of their YouTube catalog to a channel like Roku. And then they also have a new show coming out with Pocket Watch, and they're gonna be splitting half of their ad earnings.

Zoe: You know, in the past, as young stars have gotten older, they sometimes lose their popularity with audiences. How does Pocket Watch keep its stars relevant?

Chavie: So that is the challenge for Pocket Watch, you know, trying to figure out how to keep the audience but also help the audience grow and age out, and same thing with the creators as they grow up. Ryan Kaji, his channel "Ryan's World" is probably a good example. It was once the epicenter of toy unboxing and it was just nonstop toys and playing with toys. But now if you go to the channel, it's about science experiments, and animations, and ninja adventures. It's much more sophisticated and that works with Ryan's interests and it also works with Ryan's audience. But at the same time, there is still the YouTube back catalog that is playing on channels so that the younger audience or the new kids that are born are still watching some of this content.

Zoe: So are changes like the ones Ryan's channel is making just about his audience, or do these reflect how platforms like YouTube are promoting content?

Chavie: The evolution of someone like Ryan Kaji's content and Pocket Watch's evolution as well, it sort of reflects the state of kids' media because YouTube used to be known for unboxing and, like, the Egg Smash Surprise. And YouTube now hides a lot of that stuff because they recognize that there needs to be more educational material. So Pocket Watch and Ryan, and this whole industry has really evolved.

Zoe: All right, that was reporter Chavie Lieber from the Journal's Style section. And that's it for "Tech News Briefing." Today's show was produced by Anthony Bancy with supervising producer Melony Roy. I'm Zoe Thomas for the Wall Street Journal. We'll be back tomorrow. Thanks for listening.

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