By Yoree Koh
Like many children, Ryan Kaji knows what he wants for Christmas:
a gift card for the Roblox videogame. What makes him different is
that he is also the face of a toy brand himself that buttresses a
$150 million retail empire. He is eight years old.
Ryan made his name opening toys in YouTube videos, amassing 23
million subscribers to his Ryan's World channel and more than $20
million a year in advertising revenue. Now, the second-grader from
Texas is building his knack for "unboxing" -- opening boxes of toys
on camera -- into a formidable franchise, with a TV show on
children's cable channel Nickelodeon and deals with Walmart Inc.
and Target Corp. to sell his own line of toys, toothbrushes and
even underwear.
Ryan's first retail products hit shelves in 2018 through an
exclusive partnership with Walmart. For this holiday season, Ryan's
parents, Shion and Loann Kaji, and his licensing and entertainment
studio, pocket.watch, had bigger ambitions -- to have more Ryan
products in more stores and in as many departments as possible. To
help Ryan understand the magnitude of his popularity, Mr. Kaji has
considered presenting Ryan with 23 million beans or marbles.
Ryan and other YouTube child stars' influence has arguably
eclipsed that of traditional TV commercials as children spend more
time on the streaming platform. Today, there are roughly 1,000 Ryan
products being carried in 75,000 stores. In Walmart's toy aisle,
there is Ryan's "super surprise safe," which retails for $39.82. It
is a plastic cabinet with several boxes inside that children can
bash, smash or tear through to get to the various Ryan-branded
trinkets within, including slime and action figures. In the bedding
aisle at Target, a $40 Ryan's World "Twin Mystery Sleepover Egg
Super Blanky" hides a half dozen surprise goodies including a
pillowcase and a mask.
"We wanted to make 'Ryan's World' a bigger global franchise than
anything on TV," said Chris Williams, founder and CEO of
pocket.watch, a Culver City, Calif.-based studio that seeks to turn
YouTube child stars into franchises.
Retail sales for Ryan-branded products are expected to reach
$150 million this year, compared with $42 million a year ago,
according to pocket.watch.
A study by the NPD Group commissioned by the Toy Association
said 42% of surveyed boys ages two to five said that they
discovered toys on YouTube. The survey, which was released in
November, also showed that 63% of respondents up to age 14 said
that they bought or requested an item because they saw it on
YouTube. About 43% of those respondents said the item was a toy,
followed by videogames at 23%.
Ryan's mom said she and her then three-year-old began uploading
videos of him opening toys in 2015 after he watched other children
doing it and asked her if he could too. "Ryan ToysReview" was born.
The reviews could be as brief as "awesome" or "wow" followed by
several minutes of Ryan playing with the toys. Views and
advertising money poured in, and he has been YouTube's top earner
two years running, according to Forbes.
That power has attracted some negative attention, particularly
as the family began to get paid to feature certain toys or go to
places like Chuck E. Cheese, according to a complaint filed by a
consumer watchdog group. In August, Truth in Advertising wrote a
letter to the Federal Trade Commission accusing the channel of
deceptively pushing sponsored products to preschool-aged children
who can't distinguish ads from neutral content. Truth in
Advertising said that it hasn't received a response from the FTC.
The agency said it doesn't comment on submitted complaints.
A spokesperson for the family said they follow all terms of
service and honor all existing laws regarding ad disclosure
requirements.
Ryan also unboxes mystery toys on YouTube, in which a toy is
hidden inside another one, like the safe. The so-called "mystery
surprise" category has become so massive that traditional toy
manufacturers are elevating it to new heights this holiday
season.
Jim Silver, editor of review site Toys, Tots, Pets and More, or
ttpm.com, estimates that this year eight of the top 10 toy
companies are carrying things that have a surprise packaging
element to it. In comparison, "only a handful" were doing it three
years ago.
MGA Entertainment Inc. CEO Isaac Larian said he came across a
gaggle of YouTube videos of children unboxing toys a few years ago.
He thought it was strange but undeniably popular given the number
that came up when he searched for the term. The next day he told
his team to make "the ultimate unboxing toy," he said. The brand
that evolved from that -- L.O.L. Surprise -- has become an
unprecedented hit. Mr. Larian estimates the line has generated $5
billion in retail sales world-wide this year, up about 25% from
last year. This year's "L.O.L. Surprise Amazing Surprise," is an
elaborate toy-opening maze consisting of a suitcase packed with 14
dolls and over 70 surprise baubles. It costs $98 and takes a child
an average of one hour and 23 minutes to open, Mr. Larian said.
The question of how the YouTube page will evolve as Ryan gets
older and the wish to minimize Ryan's workload prompted his father
Mr. Kaji, a former structural engineer, to start to imagine a world
that expands beyond Ryan to animated characters.
Ryan goes to public school and spends three to four hours a week
filming for the family's nine channels, which produce more than 30
videos. "There was a huge risk of introducing those characters and
scaling the business back from Ryan, but as a parent that was a
risk we were willing to take to balance Ryan's personal life."
Child-development experts say that common-sense parenting, like
making sure Ryan plays with other children his age, validating his
emotions and tucking him in at night, would limit risks that could
come with being a child YouTube star.
"If the commercialization undermines the opportunity for that
kind of small group of friends playing without adult supervision,
then that'd be a risk," said Dr. W. George Scarlett, a senior
lecturer and Tisch Fellow at Tufts University who specializes in
child development.
At age 8, Ryan wouldn't necessarily understand what it means to
be a star and have his face splashed across a thousand products,
said Dr. Scarlett. That can become trickier as he hits his teen
years, develops an awareness and can feel the pressure, Dr.
Scarlett said.
The family's production company, Sunlight Entertainment, has 30
employees who are tasked with creating a cast of animated
characters and story lines that can take more of the spotlight. For
instance, as Mr. Kaji saw Ryan's interest shift from opening toys
to playing videogames, he designed a character named Combo Panda, a
headphone wearing cartoon animal that plays and reviews games.
Ryan's shows have expanded to include science experiments and DIY
projects.
Mr. Williams of pocket.watch sees the brand already making the
transition away from Ryan. He points to the Kellogg's Ryan's World
Cereal on sale at Walmart. It isn't Ryan's face on the box, but
that of Red Titan, Ryan's cartoon superhero alter ego.
Write to Yoree Koh at yoree.koh@wsj.com
(END) Dow Jones Newswires
December 23, 2019 08:14 ET (13:14 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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