Animated Movies and Creator-Led Content Are Key

Kids Headlines: Netflix Q1 2025 Earnings

Streaming Wars: Part Deux.

The Age of Subscriber Obsession is over.

The Age of Engagement Obsession has begun.

Netflix just conducted their first earnings without subs figures last night. And the world still turned.

Key Headlines:

Netflix and chill, in the face of global economic uncertainty… Despite the current world climate the streamer was unconcerned, unperturbed and unassailable from the point of view of financial results. Netflix are also quite comfy that:

“entertainment historically has been pretty resilient in tougher economic times.”

So yeah, they’re chill.

Netflix are bringing the local, local, local, local… Much was made of the streamer’s international offices and commissioning teams. They spoke on the call about their presence in 50 markets, which is impressive, and specifically referenced investment in the UK (#Adolescence) and Mexico. In their letter they said the following:

“instead of just licensing local titles, we’re now making local shows and films in many countries, commissioned by our local executives, that keep our members happy. And our local slates are improving each year”

(See what I mean by local, local, local, local?)

Sounds great, Netflix, but where are the receipts for your kids audience? Global brands and acquisition remain the focus more than ever when it comes to content served to young audiences and that really grinds my gears.

Gaming and advertising continue to build… but we’re at the stage of “innings” rather than walk, crawl, run. High five to Peppa Pig who got a shout-out about her game hitting the service #everythingeverywhere #multiplatformstrat #engagementobsesh

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Animated Films

The big discussion, as it related to the kids media landscape, was about animated features. Much to my satisfaction, there was a direct question and a direct answer. Big thanks to analyst Rich Greenfield for shooting this shot:

“How do you create iconic animated franchises? What does it really take to build out culturally relevant animated IP? Is the answer a different team, acquisitions or something else entirely?”

Ted Sarandos gave the position, which you can watch from the horse’s mouth here or digest through my key points below (with running commentary in brackets):

• Netflix still feel relatively new at this whole animated film thing… (come on, Ted, you said the ambition was to catch or pass Disney back in 2021).

• He acknowledged that for Netflix there were some hits (Leo, The Sea Beast, yes. Guillermo del Toro’s Pinocchio, er, I guess if winning an Oscar is the barometer for cultural cut through—spoiler: for kids it’s not) and some misses (see my write-up on Spellbound here).

• Animated features are a huge engagement opportunity (checks out, see my overview on US Nielsen 2024 totals).

• Netflix want to follow the model they have in other genres where they both license and produce (on the former, great, on the latter… we need to talk).

• Licensing opportunities in animated film are more accessible today than they ever have been for Netflix (true, see below observations about Paramount animated features).

• The next animated film they’re super excited about is In Your Dreams, coming from the team involved with Go! Go! Cory Carson (sorry, Pookoo from Skydance Animation and The Twits from the Roald Dahl Story Company). What’s on Netflix have the tea on In Your Dreams here.

In Your Dreams. Copyright Netflix.

The latest Netflix Kids Content Performance Report will be ready next week and we have expanded the analysis this time around to include movies. We are capturing a load of interesting insights about what films drive engagement in the longer term for Netflix and which don’t. We’re also seeing some compelling results about what impact movies have on derivative sequels and series. Watch this space as there will be more to come from me when we get this report out the door. We’re at the excruciating, endless, final 1% stage. If your company is interested in purchasing, please drop me a line.

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Movie Performance Q1 2025

The Paramount plot continues to thicken. The studio dropped a second SpongeBob SquarePants derivative film globally on Netflix, rather than hoard the spoils for their own streaming service, Paramount+. As Netflix said, the licensing floodgates have never looked better (slight paraphrase). Performance-wise, Plankton: The Movie wasn’t splashy, but it definitely washed its face, coming in neck and neck with its predecessor from last year, Saving Bikini Bottom: The Sandy Cheeks Movie. Netflix were so enthused by it that they called it out as the animated feature genre example of “must-see entertainment.”

I say there’s a Paramount plot at Netflix as the flow of content extends broadly and beyond movies. A new Fairly OddParents series dropped on Netflix last year. Plus we’re seeing mellowing for franchise content: PAW Patrol spin-off Rubble & Crew recently hit Netflix US. If YouTube is the new “Free Television,” does that make Netflix “Basic Pay”? That’s not a bad window when you’re in the business of building and sustaining brands like SpongeBob and PAW Patrol.

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TV Series Performance Q1 2025

Ms. Rachel wins, all the way! Since dropping on Netflix in the US, as well as other territories, the YouTube educator has managed to feature in the Netflix Global Top 10 in 7 out of 12 weeks, including a four-week streak going from March into April. She’s also winning big on FlixPatrol Trending Points in all of the key English-speaking markets.

I need to own up, I did Ms. Rachel dirty with a LinkedIn post I made a few weeks ago when the show failed to hit the US Nielsen ranking. I definitely owe her a bigger unpack to make it right as, by these markers, she seems to be playing a stormer on Netflix. The streamer acknowledged the success directly, highlighting the show as a “new format” they were testing, and Sarandos shouted her out as a top example of a premium creator. In the scope of the Netflix Kids Content Performance Reports we can say that, with 29M views clocked since January, Ms. Rachel is likely to make the overall Top 20 kids shows of H1 2025. She could even make a rare new entry in the Top 10. The testing period is conclusive.

The other kids show worth checking out is Netflix Global Original Dog Days Out, which broke ground for three weeks in the non-English TV ranking, as it hails from South Korea (Ampere Analysis just released a study showing that content from South Korea over indexes on Netflix).

It’s a case of hails-shmails to be honest, given the show is a dialogue-free comedy. Performance has the series approaching what was achieved by Bad Dinosaurs—great work for an outside bet, new IP, and yet another example of this format working well for Netflix. Will the show also be out in the dog house after one season? We’ll need to wait and see.

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What’s Next?

So there you have it. Netflix still need to crack animated film. That is nothing new. But it’s good to know they’ve picked themselves up and are still in the game.

In the meantime, YouTube-derived IPs remain key to their kids content strategy. And huge congrats to Ms. Rachel. I’m going to go digging for data to put together the full picture on that as I love seeing good content succeed.

In terms of the YouTube pipeline, however, there is still a mist on the future as far as I’m concerned. It’s less of a bubble that’s going to burst and more of a termite-laden floor that’s about to collapse. I wrote this up for Kidscreen earlier this year. Kids creators on YouTube have been subject to a financial famine for around six years now. Building an IP to the “premium” potential described by Sarandos isn’t possible when you can’t reach critical mass revenue in the early days. It will be nigh on impossible for the next Ms. Rachel to come up without that.