How 9-Year-Old YouTube Millionaire Ryan Kaji Is Building a Kids’ Media Empire

[Image: courtesy of PocketWatch]

In 2015, when Ryan Kaji was three years old, he asked his parents why he wasn’t on YouTube like the other kids he was watching.

Ryan’s mom, Loann, and dad, Shion, created the channel Ryan ToysReview that same year, uploading videos of Ryan opening and playing with toys and conducting at-home science experiments. Initially, they thought YouTube would be just another hobby for Ryan, like swimming or gymnastics. At the very least, it was a fun way to keep their extended families in Vietnam and Japan up-to-date on Ryan’s life in Texas. But in less than a year, Ryan ToysReview, which they later renamed Ryan’s World, was one of YouTube’s top kids’ channels.

[Photo: courtesy of Ryan’s World]

“We saw a tipping point of the channel very early on,” says Shion, whose family’s surname is Guan—Kaji is their stage name. “We were very confused because we were uploading the videos as a hobby, and the production value wasn’t that great either. So at first my wife and I thought maybe somebody was hacking our channel.”

Today, at just nine years old, Ryan is YouTube’s highest earner (child or otherwise) for three years running, according to Forbes, pulling in an estimated $29.5 million in revenue in 2020. Ryan’s World has more than 45 million subscribers across nine channels and has generated more than 62 billion lifetime views.

“It’s exciting seeing people enjoying my content and what we make,” Ryan says.

Children’s content is the most viewed on YouTube and has certainly made some very young people very rich. But the platform’s evolving policies around permissible content and what can be monetized has created something of an unstable environment for creators, especially for kid-centric channels such as Ryan’s World.

In 2019, Google was fined $170 million because YouTube violated the FTC’s Children’s Online Privacy Protection Act, which requires websites to have certain guidelines for collecting personal data from children under 13. That fine led to YouTube creating new privacy rules around videos targeted toward kids, including limiting advertising, a key revenue stream for creators. “It hit us tremendously,” Shion says. “More than half our revenue from YouTube decreased since the new regulation.”

Keeping kids safe online is paramount, but critics of YouTube’s response felt it put creators on the hook for an issue the platform created in the first place. According to the complaint, YouTube touted itself as the premier destination for kids’ content but never bothered complying with COPPA. So when the FTC finally cracked down, YouTube’s efforts seemed more reactive and sweeping, impacting creators far more than a $170 million fine flicked at a company worth billions.

Kidfluencer content on YouTube is also under the eye of watchdog organizations monitoring the disclosure of advertising products and services in videos aimed at kids. The group Truth in Advertising filed a complaint with the FTC against Ryan’s World in 2019 accusing the Kajis of not properly flagging branded videos. The Kajis disputed the claim, stating that they strictly followed YouTube’s guidelines.

Shion says he applauds any measure to make YouTube a safer environment for kids, but he also acknowledges the volatility of the platform. “Being an influencer is becoming more and more complicated,” he says. “You cannot really rely on YouTube as your full revenue source.”

To grow their business, Shion knew they had to look beyond YouTube. The massive audience they’d built on the platform opened a lane for licensing and merchandise opportunities. And to navigate that space, Shion bet on PocketWatch, a children’s entertainment studio founded by former Disney exec Chris M. Williams.

The company has serious weight behind it, with investors including Viacom, Robert Downey Jr. and Susan Downey, and United Talent Agency. The Kajis partnered with PocketWatch the year it launched, in 2017, and have since landed licensing deals with Colgate and Kellogg’s; merchandise and product launches in Walmart, Target, and FAO Schwarz; scripted TV shows on Nickelodeon (Ryan’s Mystery Playdate) and Amazon Kids+ (Super Spy Ryan); a virtual world in the massively popular game Roblox; and even Ryan’s own balloon in last year’s Macy’s Thanksgiving Day Parade.

Through these PocketWatch deals, the Ryan’s World brand pulled in more than $250 million in sales in 2020, marking the first year that the Kajis earned more from licensing than from YouTube ad revenue. Still, YouTube continues to play an important role in developing new characters in Ryan’s World who often spill over into many of the endeavors above. Consider it the kidfluencer version of a cinematic universe.

“I would look at these stars, characters, and IP that had these massive audiences on YouTube, and I would say, ‘Why aren’t we treating them like we’re Disney?'” says Williams, who serves as PocketWatch’s CEO. “Why aren’t we creating true global franchises from them?”

PocketWatch’s roster boasts other major YouTube talent including Love, Diana (194 million subscribers), EvanTubeHD (12 million subscribers), and the Eh Bee Family (11 million subscribers). But Ryan’s World, PocketWatch’s first partner, has provided a blueprint for what’s possible in children’s entertainment.

PocketWatch is by no means exempt from the conversation surrounding children’s safety online, particularly as it pertains to how a lack of clear legal protections can impact children working as influencers. And now, there’s just as much scrutiny on what kids are watching and being sold as there is on the kids making that content. But Williams says PocketWatch “is committed to setting the industry standard,” in part with a set of rules and best practices they issue to parents to create some structure and guidance for protecting their kids in a still under-regulated space.

The kidfluencer industry is fraught with safety, labor, and advertising concerns. However, with PocketWatch’s safeguards, not to mention the Kajis’ own rules for their son, Ryan’s World is continuing to build the next generation of children’s entertainment—while making sure its nine-year-old star can still be a kid.

KEEPING KIDS SAFE ON BOTH SIDES OF THE CAMERA

Navigating the kidfluencer space comes with its own set of considerations. Take Truth in Advertising’s complaint against the Kajis, for example. The FTC has rules for all influencers to disclose advertising, but there’s often a sharper eye pointed at content for kids because studies have shown that children ages five and under can’t properly discern advertising from regular entertainment.

Bonnie Patten, executive director of Truth in Advertising, says her team analyzed more than 200 of Ryan’s videos and claims to have found marketing embedded in storylines, as well as activities they felt might be dangerous for toddlers to emulate, such as playing with fireworks or spending 24 hours in a swimming pool.

“Toddlers and young children are a vulnerable population,” Patten says. “So we need to be careful what kind of marketing is coming their way.”

Truth in Advertising’s FTC complaint hasn’t gained any significant traction. Shion says that Ryan’s World was, and is, in compliance with advertising regulations.

“Creating content that is safe and appropriate for our young viewers and their families is very important to us,” Shion says. “As the streaming space continues to quickly grow and evolve, we support efforts by lawmakers, industry representatives, and regulators such as the FTC to continuously evaluate and update existing guidelines and lay new ground rules to protect both viewers and creators.”

Beyond the Kajis, Patten sees deceptive advertising as a “pervasive problem” among kidfluencers.

“[They’re] marketing to their peers and those younger than them in ways that have never been done before,” she says. “And it is very, very effective.”

The Kaji family [Photo: courtesy of Ryan’s World]

In addition to monitoring what content children are consuming, there’s also the need to monitor the children making the content.

Having a separation between work and play is an issue Benjamin Burroughs, assistant professor of journalism and media studies at the University of Nevada, Las Vegas, has been keeping an eye on in his research on kidfluencers.

“Because these are families and because it’s play, it’s difficult to have labor standards that are universally applied by YouTube or by the government,” Burroughs says. “Some of these families just churn out content. So we need to be careful that these children who are making money for their families are protected in some ways.”

Shion was concerned at how fast the channel was growing in the beginning, so he and his wife started making appearances on camera to ease Ryan’s load of having to carry a whole video by himself. They also instituted a rule that Ryan could only film three to four hours a week, so he could have time for school and extracurricular activities outside of YouTube.

To focus full-time on building Ryan’s fledgling business, Shion and Loann quit their jobs as a structural engineer and a high school teacher, respectively.

“For myself, I was giving up the career that I’d been dreaming about ever since I was little so I could fully support my son to succeed in his career. But I saw a huge opportunity for Ryan in the entertainment business to inspire kids around the world,” Shion says. “And as a parent, I was a little bit nervous seeing stories about child actors. We want to make sure any struggles Ryan faces we’ll be there and support him in any way.”

That business has exploded over the years: When the Kajis partnered with PocketWatch in 2017, they also launched their production company, Sunlight Entertainment, which has grown to a 30-person outfit of producers, editors, animators, and voice actors. Shion serves as president; Loann, managing partner; and Ryan and his twin sisters, Emma and Kate, as creative directors.

On the opposite end of the spectrum from the Kajis are horror stories such as the YouTube channel Fantastic Adventures, which shut down in 2019 after the mother who ran it was arrested for allegedly abusing her children to get them to perform. But it’s not only extreme cases that advocates are concerned about—it’s parents who inadvertently, or willfully, treat influencer work as playtime.

“Maybe that was the case 10 years ago, when you could [film your kids] on your phone and go, ‘Oh, isn’t that cute?'” says Anne Henry, cofounder of BizParentz, a nonprofit advocating for children in entertainment. “But influencers are hiring photography teams. They’re editing. They’re creating product. There is no question—it’s a business.”

Last October, the French government took a pioneering step in passing legislation to protect kidfluencers. Under the new rules, any parent or guardian of a kidfluencer under 16 will need a work permit; the child will be granted the right to be forgotten, i.e., having their content removed from a site at their request; and their earnings will be placed in a special account until they turn 16.

The U.S. federal government has yet to pass any such law specifically for kidfluencers. But attempts have been made at the state level, primarily with the Coogan Law. Named after former child star Jackie Coogan, who sued his mother and former manager in 1939 for squandering his earnings, the Coogan Law requires 15% of a minor’s earnings to be put away in a blocked trust account, known as a Coogan account. That said, the Coogan Law is only applicable in California, New York, Louisiana, and New Mexico, due to the volume of projects filmed in those states. Furthermore, it has yet to be successfully extended to social media stars. Former California assembly member Kansen Chu attempted it in 2018 with a bill that was greatly attenuated from its original version. The main hurdle lawmakers couldn’t clear was how to regulate compensation in the form of toys, clothes, and other goods that companies often send influencers for free.

Some headway has been made in recent months with SAG-AFTRA, the labor union that largely covers film and TV actors, allowing social media influencers to join. But even then, the question arises of how union rules, or child labor laws of any kind, can be enforced at home for a kidfluencer rather than on a set at a major studio.

“It all falls on the parents,” Henry says. “If the parents are doing what they’re supposed to do, great. If the parent is not so conscientious, that’s where things are gonna get ugly.”

At PocketWatch, Williams created a set of guidelines for the families of kidfluencers the company works with. Outlined in the company’s “Field Guide for Creating Kids Content” are priorities such as mandatory background checks for anyone who works directly with kids; setting the expectation that parents should put their kids’ education, socialization, and family time first; and even guidance on establishing their Coogan accounts. He also mentions that for all the kidfluencers there are these days, PocketWatch keeps its talent roster tight for a reason. In Ryan’s case, Shion says Ryan and his sisters’ earnings are distributed in multiple financial accounts, including college savings, minor accounts, and Coogan accounts.

“We are very selective about who we work with,” Williams says. “We vet partners extensively and we only work with a small number, allowing us to provide constant feedback and advice, observe them closely, and, if we ever need to, address any issues immediately.”

PLAYING SMARTER, NOT HARDER

For the Kajis, limiting Ryan’s work hours also provided the opportunity to expand the universe of Ryan’s World by adding a cast of animated characters mainly voiced by other actors. There’s Ryan’s superhero alter ego, Red Titan; the techie gamer Combo Panda and his sassy frenemy Alpha Lexa; the bookish penguin Peck; and the gummy candy fanatic Gus the Gummy Gator. Combo Panda and Gus actually have their own separate YouTube channels under the Ryan’s World umbrella, with 1.75 million and 1.7 million subscribers, respectively.

The animated characters are introduced and developed on YouTube and eventually woven into merchandising, shows such as the Amazon Kids+ special Super Spy Ryan, gaming through Roblox, and more. In a way, the Kajis and PocketWatch are creating their own cinematic universe with relatively cheap research and development all done through YouTube.

“We really believed that Ryan and his universe of character friends were perfect to demonstrate to the entire world that our thesis was correct,” Williams says. “That it’s possible to create a whole new category of kids and family franchises that had never been tapped into before.”

To David Kleeman, SVP of global trends at kids research and development agency Dubit, having content and merchandise in multiple buckets speaks directly to how kids consume entertainment. “In kids’ media, everything competes with everything,” he says. “So a kid does not say, do I watch Nickelodeon or Disney? They are thinking, what do I need right now? Is it television or is it a game? Is it a tablet or is it a big TV? Based on my mood right now, what do I need?”

Having flexibility and support from PocketWatch helps the Kajis let Ryan’s interests form the basis for how and where Ryan’s World expands.

For example, Ryan started learning about geography and U.S. history last year, which sparked the idea for Ryan’s World Road Trip, a set of collectible toys inspired by each state. He also expressed interest in becoming a game developer in the future, so Shion enrolled him in coding classes—and created his own virtual world in Roblox last December.

“New ideas come up in our everyday interaction with the kids,” Shion says.

Williams says there are additional initiatives across gaming and consumer products launching this year for Ryan’s World but declined to disclose details.

For Shion, exploring multiple avenues under the banner of Ryan’s World has been the ideal scenario for letting Ryan figure out where he wants to take his career in the future.

“I thought he wanted to be a comedian last year, and now he’s saying he wants to be a game developer,” Shion says. “I want him to try different things while he’s a child. The last thing I want is him to feel like he doesn’t have any other options besides being YouTuber.”

Shion believes that the PocketWatch partnership has made it easier to build a future for Ryan beyond YouTube. The video streaming site has been an invaluable launching pad for many creators, but the platform’s evolving regulations, particularly around kids’ content, are taking a toll on creators. Even off YouTube, kidfluencers are in something of a gray area in the entertainment industry. PocketWatch has provided a clearer path forward to build out kidfluencer brands while attempting to safeguard against exploitation.

“[PocketWatch has] helped us set up our kids’ financial success among many other important elements to ensure a healthy, safe, and positive experience working in the digital world,” Shion says.

As for Ryan, his take on being a kidfluencer is pretty simple—as it should be.

“I’m a kid,” he says, “and I’m doing what I like to do.”

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