GROM - Social Media Stock Plays To Radar Today
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Social mediaplatforms have become ubiquitous over the past 15 years, with manypublicly traded companies making waves in this space. From establishedgiants like Facebook and Twitter to newer entrants like TikTok and Snap Inc. (NYSE: SNAP) , the competition is fierce and thepotential for growth is enormous.
One segment that has caught the attention ofinvestors and industry experts alike is the children's socialmedia market. As more and more young people become active online,there is a growing need for platforms that cater specifically to theirneeds and interests.
Established players such as YouTube, a subsidiary of AlphabetInc. (NASDAQ:GOOGL) , and Instagram, owned by Meta PlatformsInc. (NASDAQ: META) , have also introduced features specificallyaimed at younger users, and new entrants are popping up all the time.As investors, it's important to keep an eye on these developmentsand assess the potential for growth in this exciting and rapidlyevolving market.
In this article, we'll take a closer look at some of thekey players in the children's social media space and explore thepotential for growth and investment opportunities in this excitingsegment of the social media and entertainment industries.
One company that ismaking a name for itself in the children's social media andentertainment space is Grom Social Enterprises Inc. (NASDAQ:GROM) , a diversified media, technology, and entertainment companydedicated to family-friendly programming, web filtering technology,and safe social media for kids.
Grom Social Enterprises has several operatingsubsidiaries. Grom Social is their "mothership," a mediaplatform devoted to safe social media for children under the age of13, who are barred from using most social media platforms withoutparental permission. The app allows children to chat with theirfriends, view original content, and/or play games designed by thecompany, and it is monitored by live associates 365 days a year. Theplatform entertains children, allows them to interact with friends,access relevant news, and play proprietary games—all while teachingthem how to be good digital citizens.
At the start of the year, Grom Social announcedthat they are currently working to rebrand and relaunch the GromMobile App. The app will relaunch with a focus on improving the in-appuser experience, and GROM says they have identified unique features todevelop and implement in 2023.
GROM Social CEO Darren Marks says, “We believethat these enhancements and additions will drive user traffic and pavethe path to monetization, first through traditional advertising andsponsorship models and later through paid subscription.
Parents are demandingthat these online spaces be better controlled to be more kid-friendlyas the social media landscape changes. A study on early social mediainitiation found that “initiating social media platforms, namelyInstagram or Snapchat, in later childhood (10 years of age or younger)was significantly associated with problematic digital behavioroutcomes.”
Withparents turning to other social platforms due to a lack of parentalcontrol capabilities and fear of what their children are doing on theinternet, the Grom Mobile app has the potential to be a game changerin the space.
Another GROM subsidiary in the children's entertainmentspace is called Top Draw Animation. Top Draw produces animated contentthat has garnered recognition for some of the biggest mediaorganizations in the world.
On March 8, GROM announced that they will lendtheir animation expertise to season two of Mansour , an emerginganimated hit series from Bidaya Media, the production team behind Iftah Ya Simsim , which is the Arabic language version of SesameStreet.
“Withrich characters, compelling storylines, and top-shelf animation,Bidaya Media has crafted the perfect hit series,” said Top DrawAnimation President Russell Hicks. “We are thrilled to secureanother major win for Top Draw, which continues to be a key growthdriver for Grom.” Hicks continued.
Grom Social Enterprises Inc. also includes GromEducational Services, which provides web filtering for K–12 schools,the government, and private businesses.
With their innovative children's socialplatform that includes social as well as educational and entertainmentcontent, GROM is poised to pave their own path towards being the topplayer in the children's social media sector.
Their platform providesa safe and engaging space for kids to connect with their friends,share content, and learn new skills. With the potential forsignificant growth in this market, GROM is poised to become a majorplayer in the children's social media and internet safetyindustry.
SnapInc. (NYSE: SNAP) , the disappearing photo application, rose toprominence on the backs of a younger user base than some of itscontemporaries. The app seemingly exploded with the rate of use amongteens and tweens with the app’s use of filters and contentmodification tools.
Last year, the company announced an update to make the appsafer for its younger user base. The parental feature is an in-apptool called Family Center that allows parents to oversee theirchildren's accounts. The home area of the Family Center displaysthree options: view the child's friends, see who they'vemessaged in the past week, and report abuse or safety concerns.
"Family Center isdesigned to reflect the way that parents engage with their teens inthe real world, where parents usually know who their teens'friends are and when they are hanging out, but don't eavesdrop ontheir private conversations," according to the company. “.urgoal is to help empower parents and teens in a way that still protectsa teenager's autonomy and privacy."
According to PewResearch, 80% of all parents with a child age 11 or younger say theirchild ever watches videos on YouTube, owned by Alphabet Inc.(NASDAQ: GOOGL) , with 53% reporting that their child does thisdaily, including about a third who say this happens several times aday (35%).
In2015, Google launched YouTube Kids, a website and video app, as a fun,family-friendly place for kids and families. The YouTube Kids app haspopular children's videos and diverse new content, delivered in away that's more child-friendly. The app provides a version of theYouTube service oriented solely towards children, with curatedselections of content, parental control features, and filtering ofvideos deemed inappropriate for viewing by children under the age of13.
YouTube Kidshas faced criticism for multiple concerns, including the use ofcommercial advertising as well as algorithmic suggestions of videosthat may be inappropriate for the app's target demographic ofchildren under 13, as the app has been associated with a controversysurrounding disturbing and/or violent videos depicting characters fromchildren's media franchises.
Criticism over the videos led YouTube to announcethat it would take more stringent actions to review and filter suchvideos when reported by the community and prevent them from beingaccessible from within the YouTube Kids app.
While YouTube stands outas the most common online platform teens use, according to PewResearch, 62% of teens are also using Instagram, which is a subsidiaryof Meta Platforms Inc. (NASDAQ: META) . Instagram has madechanges in the past, such as new safety settings for young users,making new accounts private by default for kids under 16, blockingsome adults from interacting with teens on the platform, andrestricting how advertisers can target its younger users.
The changes are a resultof the increased pressure that lawmakers, regulators, parents, andchild safety advocates have placed on social media platforms becausethey are concerned about the effects of social media on children'ssafety, privacy, and mental health.
While not involved in children's social media, Nextdoor Holdings Inc. (NYSE: KIND) is a company that couldbenefit from a government crackdown on foreign social media apps, suchas Tik Tok.
Nextdoor is an app where you connect to the neighborhoods thatusers live in. Neighbors around the world use Nextdoor to receivetrusted information from hyper-local users, give and get help, getthings done, and build real-world connections with nearby neighbors,businesses, and public services. The Nextdoor application tends tocater towards an older audience, one that certainly has some crossoverwith other apps currently under scrutiny, and could see a push ifother social media apps are banned from the US.
KIND unveiled a new line of products onMarch 7 to help small businesses expand in the face of escalatingeconomic difficulties. According to the company, small business usersnow have access to an expanded set of free marketing tools, includingevents, polls, video, and unlimited business posts. This will unlockmore ways to create meaningful connections with a high-intent localaudience.
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