San Francisco - June 6, 1997

That 400 leading and aspiring online content providers gathered here for the Jupiter Communications Digital Kids '97 conference is indicative to the industry of the growth and economic potential associated with the younger generation going online. Jupiter projects that the number of kids online will grow from 4 million now to 30 million by 2002, representing 45% of children in the US. The expected break down will be 10 million accessing from home, 10 million from school and 10 million from both home and school. Kids are the market for the foreseeable future.

Other interesting numbers quoted at the conference:

• To the age of 10, boys and girls spend the same time on computers. Boys are only 6% more likely to use computers between ages six and seventeen. The usage difference after age 10 is believed to be that girls' use of computers becomes more purposeful. Boys are happy to spend time playing games.
• And speaking of games, their developers soon will be building into their CD-ROM titles an optional online component. For avid gameplayers, being able to go online adds variety and interest to the game, as well as the opportunity to find an unlimited number of partners and opponents.
• Parents buy one software game for girls for every four they buy for boys. Also recognized here is that the kinds of games available with explosions, violence, etc. do not appeal to girls - hence a growing business producing games for girls. Her Interactive and Girl Games were two companies specializing in this market. (See Girl Games' "about us" page for a lot of interesting statistics on this market.)
• 45% of households with PCs have children. Look for a growing volume of advertising and content to be targeted at the family. Look also for the big players to be Disney, Nickelodeon, Hasbro, Mattel, Sony. That is, media companies, toy and game producers, anyone whose market is families and kids.

All the key names are investing for the future knowing that their return on investment is two to five years away, but heavily investing they are. Top management from all of the above companies as well as PBS were in attendance at Digital Kids. And there are major school-related projects afoot with significant sponsorship from leading corporations, including IBM's commitment of 80,000 hours of code to building the American Schools Directory and Sprint's involvement in The Jason Project. Yahoo! seems to have positioned itself nicely: It's the only search engine targeting kids right now, with its Yahooligans! site.

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And what issues do content providers have on their minds? What are the hurdles they need to clear in order to market to families and kids online?

Safety
All content providers are very conscious of parent concerns about young people having safe experiences online. They are very concerned about chat and recognize that, where they offer chat rooms for kid, they have to bear the cost of patrolling those areas. Realistically, however, they look to parents to be partners in the process, to be aware of their children's online activities and teach them to be careful of strangers and not to reveal personal information online.

It will be interesting to see whether the delivery of content by new media including WebTV and WavePhore mitigates safety concerns, since the stream of data delivered can be pre-packaged and scheduled with the trade-off of more limited interactivity. This means families can gather in the living room and interact with Internet content selected by each family.

Advertising
The president of Hasbro said his company is working with the FTC, following FTC concerns about the data children were being asked to provide about themselves through Hasbro's site. KidsCom was doing likewise and responding by using an "AdBug" to clearly label ads on their site, a concept the site is licensing to other providers. The industry is seeking consensus on what practices are appropriate when children register at their sites and when promotions are conducted. And, as AdBug indicates, there is also sensitivity about making ads distinguishable from content to young users.

Gender differences
Leading content providers are conscious that, since online is a new medium, it presents an opportunity to do a better job of respecting girls and providing content that serves their interests - not just another action game with a token pink background.

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Of special interest to SageNet was the last session of the conference. Hosted by KidsCom, it included a panel of six exceptional young online users. Clearly they were not the average young user; the Nickelodeon gentleman sitting next to us was shaking his head - his market research indicated that this panel did not represent typical young users! What the session highlighted was the reality that the content of interest to young people and families, and being used by teachers in schools for educational purposes, is not necessarily on sites that would be perceived as educational. For example, one student regularly visits the Discovery Channel site. Another has a favorite site for downloading Macintosh files and utilities; the girls liked Girl Talk.

Kids do not necessarily gravitate to "kid-cute" content. Hasbro's CEO told us teachers are using Scrabble in hasbro.com to teach spelling; Blackberry Creek - an area on America Online billed as "The Kids Creativity Community" and run by Joanne Tauffr, the founder of Blackberry Creek Multimedia - has teachers taking advantage of craft activities and writing projects as class projects; and Sony has a section of "kneeware" activities for parents and young children (don't you love it? "kneeware" and "lapware" referring to computer activities for parents and children while the latter are sitting on their laps!).

Do you agree that safety, advertising, and gender-appropriate content are the key issues with young people online? Do you have other concerns? E-mail your thoughts from our feedback page.

Our impression from the conference is that the major content efforts right now are targeting the under-13 market and that teens tend to use general-interest sites. Is this your experience? Let us know.

Look for our next edition, which will bring you news of interest to parents from the PC Expo in New York, June 16-19.