Season 2 of “Axios on HBO” airs Sundays at 6pm ET/PT. Keep up to date with Axios AM:

Stories

Children's advertisers move their business away from YouTube

Reproduced from a PwC chart; Chart: Axios Visuals

A new report out Tuesday from PwC finds that by 2021 more children's advertisers will shift their budgets away from YouTube and channels that are non-compliant with children's privacy laws.

Why it matters: Almost a billion kids will be covered by digital privacy laws by 2021 around the world, thanks to new regulations being introduced in Europe (GDPR Kids), India (PDPA) and China (PIS), per the report, commissioned by SuperAwesome, a platform used to power kid-safe technology.

Be smart: This will intensify as regulators globally commit to children's privacy law enforcement. The FTC said earlier this year it will seek to extend liability to individual executives in companies acting illegally.

Yes, but: The report finds many of the major content services that have dedicated, vetted content for children are subscription-based, like Netflix, Disney+, Apple and Amazon.

  • "For the media companies, big winners in kids sector are those investing in advertising-based video on-demand services (AVODs), like Viacom," says SuperAwesomeCEO Dylan Collins.

By the numbers: The report estimates that kids digital ad spend will reach $1.7 billion worldwide by 2021, roughly 37% of total kids ad spend. This number projected to grow even further as more investments are made in kids tech.

  • To date, YouTube is the largest kids digital entertainment and advertising platform. While YouTube Kids has gained some traction with children, the report finds that the app has had little traction with advertisers to-date.

Go deeper: YouTube CEO apologizes to LGBTQ community but defends actions