But developing apps that will appeal to kids is a real challenge. A variety of enterprenuers and developers who work with technology intended for kids and parents spoke at the 500 Startups Mamabear conference in Mountain View Friday, where they talked about the challenges but potential benefits of building for the younger set.

Complying with privacy guidelines

One of the biggest hurdles for app developers — which should comfort parents concerned about the privacy of their kids — is complying with COPPA, the regulations from the FTC that limit the data that developers can collect from kids like names or photos, and which require developers to attain permission from parents before they acquire any data.

Building a viral social app while complying with COPPA can be tricky, and most notably, COPPA got Path into trouble when an FTC investigation found underage users on the app, which led to a $800,000 fine for the company and 3,000 accounts getting purged from the system.

Shai Samet, a lawyer and privacy consultant who runs the startup kidSAFE Seal Program, talked about how developers can work with the COPPA guidelines to create apps for kids, reminding them that all sorts of information, from real names to photos to videos to geolocation, is all information you need parental consent to collect. You also can’t include social plug-ins for apps like Facebook, or include behavior tracking ads like Google ads, both of which are common monetization strategies, if they’re targeted at kids.

“There’s really three key strategies to avoid COPPA regulations in some scenarios and be able to scale user growth,” he said. Samet pointed to three different tactics, which include anonymizing data from kids (so you’re not collecting real names), limiting sign-ups to kids over age 13 (if acquiring younger users isn’t a requirement for success), and picking the easiest form of acquiring parental consent (avoiding credit card numbers or social security numbers if possible and opting for email instead.) Shamet’s full presentation can be found online here.

App-testing with more distracted users

Plenty of app developers will host focus groups for their target audience to see how people respond to products and how they interact with devices. But when it comes to app-testing with kids, (especially those who aren’t verbal yet), it can be a lot harder to get feedback.

Sandra Oh Lin, the founder and CEO of Kiwi Crate, talked about how to do focus groups and app testing with kids, and how it can depend on the age of the kid with whatever tactic you take.

“Adults have no problem telling you what they think,” she said. “They’ll walk you through and say, ‘Here’s why I’m tapping on this.’” But for kids, you have to do a lot more observation to see how they interact with a game, since they might not tell you why they don’t like something. Plus, they’re extremely prone to distractions, and keeping them focused on the task is tricky too.

But if your focus group works well? Remembering to contact all of those people when your product ships to tell them about it can give you an automatic user base to start with.

Figuring out the content that works

It sounds obvious, but the people designing the apps for kids aren’t kids themselves, so figuring out the content that appeals to them can be somewhat of a learning process.

Mark Schlichting, CEO of NoodleWorks Interactive, said that in creating content for kids, age matters. For instance, an app designed for a toddler who doesn’t yet associate letters with words will have a totally different impact when the game is played by an eight-year old. Some age groups might find some material terrifying that wouldn’t bother a slightly older age group — understanding your audience here is key.

Plus, kids often find new uses for an app that the developer didn’t even intend. Schlichting said they found that kids were tapping a particular part of the app in a way that caused it to crash. A developer asked him if they should fix the app and make it un-tappable, but instead he said it’s important to capitalize on how kids are using it.

“I realized, this is an inherent play pattern that we didn’t know was in here,” he said. What are the things kids like in an app? Everything in an app should be highly tappable, responsive, and interruptive, he said. ”Don’t trick ‘em.”

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Dailymotion’s France EVP Martin Rogard tells Les Echos the Dailymotion Kids Plus package, will host a library of over 1,000 videos after acquiring licenses from producers, who will be paid according to subscriber numbers, including Inspector Gadget maker Cookie Jar.

The launch is interesting for three reasons:

1. It shows Dailymotion is searching for more non-advertising income.
2. It further illustrates that operators are attracted to chargeable kids’ content.
3. It comes as Dailymotion’s ownership is likely to change in the next few months.

1. Dailymotion fortunes

Dailymotion recently tied up with Pirate Bay co-founder Peter Sunde’s Flattr system to allow viewers to make micropayment donations to video creators they value.

But that pales against a full paid video strategy, which is ramping up. Dailymotion is likely to follow up its kids’ package with further categories including movies, Rogard tells Les Echos:

“We’re starting to educate our partners on the subject. Systematically, we will propose a mix of free and paid content. For us, it is important to walk on our own two feet.”

2. Kids boom

Netflix recently carved out its kids section with a separate UI. Amazon recently launched an unlimited kids content strand atop Amazon Prime. Each clearly believes  that on-demand cartoons and other shows are assets modern parents will happily pay for.

And why not? Prospects for kids content payment are healthy. FT:

“A study of 2,200 iPad-owning parents in the US and the UK, carried out by Kids Industries, found that parents downloaded an average of 27.2 apps for their children each year, spending about $100 in total.”

3. Investment coming

Today, Orange owns 49 percent of Dailymotion following its €61 million 2011 investment. When it invested, the telco also took an option to buy the remaining 51 percent. That right must be exercised by the looming spring 2013.

Although Orange may soon do so, such a deal would not be forever, 01net reports:

“Orange does not intend to stay a 100 percent shareholder of the site for long.

“The telephone company is looking for a new shareholder, and it has already mandated two banks — Messier, Maris & Associés of France and Raine of America.

“One avenue under consideration is to find a U.S. shareholder which would help to develop Dailymotion overseas.”

The implication here is that Dailymotion’s venture backers want out, and that, in their absence, Orange does not want full long-term ownership either.

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“Adding a 4G mobile broadband product with Clearwire gives our customers new connectivity options and allows Kajeet to expand our mobile service offerings so that we continue to lead in the creation and delivery of mobile solutions that are great for kids, families and educators,” CEO and founder Daniel Neal said in Kajeet’s announcement.

Kajeet is already selling mobile broadband dongles and hotspots through its education arm, which provides schools with devices and connectivity for learning purposes. It may now be planning to bring those devices over to its consumer-facing carrier business, which for now is focused on selling feature phones, smartphones and tablets.

Backed by Draper Fisher Jurvetson, Kajeet differentiates itself from the competition by offering parental control and management software with every device. Parents can define the phone numbers allowed to call the device, restrict usage by time and track their kinds using GPS. Modems are typically open connections to the internet, but Kajeet has developed similar management software for schools called Sentinel.

While putting a 4G hotspot into a child’s hands might seem extreme, it makes more sense if you think of the device as an internet nanny rather than a modem. Children are increasingly connecting to the internet with devices through Wi-Fi: tablets, e-readers, PCc, etc. By placing its protection software on a hotspot, Kajeet can expand its parental control services to devices it doesn’t sell or directly connect.

Photo courtesy of Shutterstock user Hasloo Group Production Studio

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Hulu Kids comes with shows from PBS, Nickelodeon and Lionsgate, and the content is sorted by age groups. The total number of shows listed on the section currently stands at 43. A spokesperson confirmed that Hulu is working on bringing Hulu Kids as a separate content section within the Hulu Plus app to additional devices.

The new Hulu Kids section is noteworthy for two reasons: First of all, Hulu is obviously taking a page from Netflix’s playbook here. Netflix launched its own kids section on the web last summer, and has since started to bring the section to a number of mobile and connected devices. The main difference between the two offerings is that Netflix actually changed its design for the kids section to make it more visually appealing and easier to navigate for kids, whereas Hulu just relies on its recently relaunched web UI.

But Hulu Kids is also interesting for another reason: Making this kind of content exclusively available to Hulu Plus subscribers shows that Hulu is starting to put a much bigger emphasis on its paid offering, and slowly deemphasizing the free Hulu.com website in the process. The fact that these kids shows are available ad-free is good news for parents who don’t want their kids confronted with advertising, but it’s also a sign that Hulu is moving towards becoming a more direct competitor for Netflix, which has always been ad-free.

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Not only does it feature some famous faces (Sir Tim Berners-Lee, Niklas Zennstrom, Chad Hurley and many more) but it also actually made me chuckle.

Basic premise: a panel of kids is hiring for CodeClub. And guess who turns up to the interview…

I could have done without Prince Andrew’s appearance (here’s why) but still.

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Upon launch, the app prompts viewers to either access the regular Netflix experience or Just for Kids. The kids section adds TV show characters as categories and allows children to find episodes of a show without relying on text. Check out a few snapshots of Just for Kids on the Boxee Box below:

As you can see, there are still some kinks to be worked out with the little text that actually does get displayed.

Netflix launched a kid-friendly UI as part of its website in August of 2011. It began bringing Just for Kids to connected devices late last year, beginning with the Wii and then quickly rolling it out on the PS3 and the Apple TV. “More will follow through the course of this year, including Xbox and iPad,” I was told via email by a company spokesperson.

Kids content is undeniably one of Netflix’s key strengths, and the company has been adding numerous kids TV shows from PBS, Nickelodeon and others to its catalog. In fact, Netflix has been so successful with the youngsters that some blame it for Nickelodeon’s recent double-digits ratings drop. Both Netflix and Nickelodeon corporate parent Viacom have maintained that the service isn’t at fault for fewer kids watching Nickelodeon, but Bernstein Research’s Todd Juenger recently presented some data that makes a good case for Netflix really taking over kids TV.

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In its latest “quick report” (PDF), the Cooney Center studied 32 child-parent pairs. The kids were all between 3 and 6 years old. Half the pairs read a print book and a regular e-book and the other half read a print book and an enhanced e-book (defined as an e-book with “enhanced multimedia experiences” like games and other interactive features, and the focus of reading apps like Scholastic’s Storia and Ruckus Reader).

Kids who read enhanced e-books remembered “significantly fewer narrative details than children who read the print version of the same story.”

And “both types of e-books, but especially the enhanced e-book, prompted more non-content related actions (e.g., behavior or device focused talk, pushing hands away) from children and parents than the print books.” This will be familiar to anyone who has ever used an iPad with a kid (or adult) and pointed out a cool iPad-related feature.

The Cooney Center recommends that “parents and preschool teachers should choose print or basic e-books to read with children if they want to prioritize literacy-building experiences over ones intended ‘just for fun,’” and says enhanced e-book designers should “exercise caution when adding features to enhanced e-books, especially when those features do not directly relate to the story.”

It also notes that enhanced e-books can be a good tool to “prompt less motivated young readers toward engagement when they might otherwise avoid text altogether.”

via Digital Book World

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USAID funded the Worldreader Ghana study and independent firm ILC Africa did the research. iREAD “involved the wireless distribution of over 32,000 local and international digital books using Kindle e-readers to 350 students and teachers at six pilot schools in Ghana’s Eastern Region between November 2010 and September 2011.”

The full results are here (PDF). Some findings:

• Kids learned to use e-readers quickly even though 43 percent of them had never used a computer before. Also, not surprisingly, they were quick to discover “the multimedia aspects of the e-reader, such as music and Internet features.” (Kindle has an experimental web browser and can play MP3s.) Worldreader is “exploring ways to limit functions on the e-reader such as music” so that kids don’t get distracted during class, but points out that e-readers can also be a useful “bridge” device for students who’d never used a computer before.
• Near-zero theft. Only two e-readers (out of 600) were lost in the whole study, partly because “community involvement was encouraged through e-reader pledges, community outreach programs, and support from community leaders.”
• Kids got access to way more books. Before the study, primary-school students (whose average age was 11) had access to an average of 3.6 books at home. Junior-high students (average age 13.5 years) had access to an average of 8.6 books at home and high-school students (average age 16.6 years) access to an average of 11 books (mostly textbooks they had to buy for school.) With the e-reader program, kids had access to an average of 107 books, including books Worldreader “pushed” onto the Kindles as well as free e-books that kids downloaded themselves.
• Primary school students’ test scores improved, but effects on older kids were less clear. The reading scores of primary-school students who received e-readers increased from 12.9 percent to 15.7 percent, depending on whether they got additional reading support. That was an improvement of 4.8 percent to 7.6 percent above the scores of kids in control classrooms without e-readers. But results for older kids were mixed: “Student reading was affected almost exclusively at the primary level, and not at the junior and senior levels. This conclusion supports external data that students are most affected by reading interventions at the primary school stages between the ages of 4 and 10.”
• Students sought out access to international news. “Amazon data revealed that students were downloading The New York Times, USA Today, and El País etc., demonstrating that students want to access a wide range of reading materials that were previously inaccessible.”
• Some teachers worried kids became too dependent on the e-readers.  ”For example, one teacher stated that students thought that everything on the e-reader was the ‘absolute truth.’ He had to correct them by  explaining that the e-books may contain mistakes just as paper books do. Teachers also observed that some students have started to favor classes that use the e-reader and neglect classes that do not.”
• Kids shared their e-readers with their families and friends. Students, even primary schoolers, got to take their e-readers home at night and many reported sharing the devices. Kids in the study had an average of five siblings, so “the e-reader’s reach potentially extended to many people beyond the device’s owner.” Some kids whose parents were illiterate read to their parents from their e-readers.
• Kindles break too easily. Worldreader had not predicted how many Kindles would break: 243 out of 600, or 40.5 percent. Each time an e-reader broke, Worldreader sent it back to Amazon to conduct “a post-mortem analysis.” Turns out “fragile screens are the main weakness” and Amazon is working on Kindles with reinforced screens (at the same cost), which started shipping to Ghana in October 2011. Plus Worldreader is providing more rugged cases for the Kindles and providing more instruction on how to use them (don’t sit on it, for instance).
• The program appears cost-effective. Worldreader estimates that “for the years 2014-2018, using a calculation focused strictly on the provisioning of textbooks, the e-reader system would cost only $8.93-$11.40 more per student over a 4 year period [$0.19 to $0.24 per month] than the traditional paper book system.” That calculation is made with the assumptions that e-reader prices will fall and e-readers will become more rugged (so they break less). And of course, e-readers give students access to many books, not just textbooks.

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Ruckus Reader titles can be downloaded individually, or parents can buy access to the whole library for $24.99 for six months. The first title in a series is free; after that, titles are $3.99 each or 2 for $5.99. For now, Ruckus Reader offers 25 titles — a mixture of interactive “iReaders” (enhanced e-books with video and games), straight e-books and “vidReaders” (video books narrated by celebrities like Meryl Streep and Robin Williams). Ruckus CEO Rick Richter, formerly president of the children’s division at Simon & Schuster, told me the company expects to include around 500 titles by the end of the year.

In addition to the brand-related content it developed itself, Ruckus is partnering with other book publishers to deliver e-books as well. The first partnership is with Houghton Mifflin Harcourt, which is providing Curious George titles. Richter said other “major publishers” are “lined up.”

How do your kid’s reading skills stack up?

“Right now, 1 in 4 kids has access to an iPad,” Richter said. “In 70 percent of households where an iPad is resident, the child has access. In 40 percent of households, kids use the iPad every day. It’s a family device.”

Ruckus Reader tracks kids’ in-app reading skills — the apps support up to 4 accounts, so parents can track more than one child on the same title — and reports back to parents with a weekly “Reader Meter” e-mail that ranks children’s mastery of “phonics and word recognition, print awareness, fluency, alphabetic knowledge, sequencing and story comprehension in real time.” The rankings are weighed against the national Common Core State Standards. “We are trying to make sense of all the options available to children in a digital age and strive to understand when screen time is delivering real educational value,” Richter said in a statement.

Through a partnership with School Library Journal, each parent e-mail includes a list of recommended print books for their child’s reading level.

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Kid-friendly and kid-loved

The iPad and the iPhone have a knack with kids, as any parent and iOS user will tell you. The brightly lit, touch-screen technology that appeals at an emotional level to adults is no less effective on children, who are more liable to indiscriminately touch things to see how they react to begin with. Kids are also voicing their demand for iOS devices as soon as they’re able to; recent surveys found that iPhones, iPod touches and iPads topped the wish lists of children ranging from the very young to the nearly adult. In fact, 52 percent of children between the ages of zero and eight already have access to a mobile device of some kind, many of which are probably running iOS.

Cross-branding opportunities

Accessories and apps seem to be either fueling or cashing in on this trend, too, at a growing pace. Consider the partnership announced Tuesday between Disney and iHome, maker of audio accessories for iOS devices. Characters from Disney’s stable of brands will be adorning iHome iPhone docks, headphones, and speaker systems starting this holiday season, at major outlets like Toys ‘R’ Us and Bed Bath & Beyond. Think about it: A Kermit the frog docking alarm clock assumes a lot of kids either are already or will be sleeping next to iPhones next year.

Disney and iHome aren’t the only ones cashing in on the youthful appeal of Apple’s mobile gadgets. Perennial Apple accessory maker Griffin is partnering up with Crayola to create the iMarker, essentially a branded stylus kids can use in conjunction with a coloring book app. Both Disney and Crayola are playing it smart, taking parent-trusted brands and combining them with the expertise of industry-leading third-party gadget manufacturers who already know the ins and outs of making devices for Apple products.

A new vector for content-makers

It isn’t just accessories getting the kid-friendly treatment. Content producers have kids in mind with their iPhone and iPad offerings, too. PBS announced Tuesday (.DOC link) that its PBS KIDS video app for the iPad is now available on the iPhone and iPod touch, too. The iPad app, which launched in May, has delivered on average two million video streams per day to its more than 450,000 users, growing steadily since its introduction. Reaching out to iPhone and iPod touch users broadens the potential audience, so that kids can check out full episodes of programs like Sesame Street and Super Why on smaller-screened devices if they don’t happen to have a tablet handy.

This is just the beginning of a coming flood. Whereas once the kid appeal of iPhones and iPads was an unexpected bonus to a parent’s purchase, now parents are seeking out Apple devices with full knowledge that they also make good distractions and educational tools for their young ones. And since people are often even more willing to spend money on their children than on themselves, the market for kid-focused apps and accessories has likely only begun to heat up.

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