Netflix Is Doing It for the Kids

Some of Netflix's biggest fans don't even have a credit card. Luckily for the Internet video company, their parents do. With a dedicated children's portal, recently bolstered by a theatrical deal with Walt Disney, Netflix is solidifying its place as a go-to network for young kids. For parents, Netflix offers a commercial-free collection of age-appropriate content, viewable on televisions and tablets alike.

For Netflix, children offer a captive audience that generally cares less about the newness of programming, allowing the company to serve them content that typically costs less. But Netflix's popularity with children could be a double-edged sword. Analysts say the streaming service could be undermining the very companies that supply it with most of its children's television content, namely Disney and Viacom. Ratings for the kids' cable genre were up 8.5% year-over-year in the first quarter among those who didn't stream content and only 0.4% among those who did. Disney ratings grew 11% for nonstreaming users and 6% for streaming users, while Viacom ratings grew 6% for nonstreaming users and only 2% for streaming users.