YouTube is a huge success. The chance of anyone successfully taking it on without millions of dollars in resources is remote. Given this, most entrepreneurs focus on particular sub-niches in the video platform field. In this post, we take a look at legal considerations to be taken into account when starting a video website targeted at kids instead of adults.
Children are very visual. One only has to take a look at a child zoned out watching television to realize as much. Given this, the idea of starting a video website for kids would seem to be a path to untold riches. There are three primary considerations you must take into account before launching such a site.
Any business focusing on kids as a target audience needs to ruminate over one issue – monetization. For the purpose of this article, we are talking about children under 13. The problem with these kids is they don’t have money and certainly don’t have credit cards to buy things online. This fact raises a simple question – how are you going to make money?
The answer depends entirely on the nature of your site. There is no “right” answer per se. What I can tell you is it makes sense to come up with three to five potential revenue sources, so you have flexibility moving forward. If you can’t arrive at a plausible monetization plan, then you may need to rethink the business.
The Digital Millennium Copyright Act of 1998, better known as the “DMCA,” creates a process for dealing with copyright issues online. The law is complicated, but the vital thing to understand is that it provides you with immunity from being sued for copyright infringement if you comply with it.
Why is copyright infringement an issue? Songs, videos, television shows, images, stories, and so on are all copyrighted works. Kids tend not to know this. If they upload videos to your site, a good number of those videos will contain copyrighted work. The copyright holders are not going to be pleased. They will seek to protect their rights by filing copyright infringement claims.
The DMCA protects a passive video site from being sued for copyright infringement based on the information uploaded by users. The video site must comply with the technical requirements of the law including designating a DMCA agent service to handle copyright claims, establish repeat infringer policies, etc., to gain this immunity. It is an administrative burden, and most sites hire an internet attorney such as myself to handle the DMCA issues.
Regardless, YouTube uses the DMCA as a shield against an avalanche of copyright infringement lawsuits. Anyone starting a kid’s video website would be smart to follow the same strategy.
COPPA stands for the Children’s Online Privacy Protect Act of 1998. As the name suggests, it is a law detailing how a site directed at or giving access to kids under the age of 13 must act in relation to protecting the privacy of the child. The burden of doing this is significant.
It is impossible to explain COPPA within the scope of this article given its complexity. Generally speaking, it is essential to understand the software on your site will need certain functionality to comply with the law, and a lawyer must prepare the site documents [terms/privacy] in a very particular manner. On top of all of this, you must obtain verified parental consent before allowing children under 13 on your site or app.
Compliance with COPPA is not a laughing matter. The FTC enforces the law online. The Commission penalties can be as high as $16,000 per violation. The FTC considers each child on the site as a violation. If you fail to comply with COPPA and have 100 kids registered as members on the site, you face a fine of up to $1,600,000. As a real-world example, a company running fan sites for Justin Beiber and other teen stars recently paid a million dollars in fines to settle COPPA complaints.
Video sites are very popular online these days. If you are considering starting such a site with kids as the target group, you need to be very careful. Contact me to discuss your idea.
Richard A. Chapo, Esq.