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Little Ears Are Big Bucks for Music Players

Why Marketers Should Care That Almost One-Third of Users Are Kids 10 or Younger

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YORK, Pa. (AdAge.com) -- Taylor Witmer loves her new iPod Nano. There's only one problem: The ear buds keep falling out. And while that's a pretty common problem for joggers, in Taylor's case, it's because her 5-year-old ears are just too small. That's right -- she's in kindergarten.
Lower prices and more choices in players help spur purchases of mp3 players for kids.
Lower prices and more choices in players help spur purchases of mp3 players for kids.

Nearly one-third of digital-music-player users these days have to be in bed before 9 p.m., and that's opened a market for specialized players and ancillary products -- not to mention exploding demand for kid-themed video and music content.

"The average age of first use of portable digital-music players has declined over the last three years," said NPD analyst Anita Frazier, who recently conducted a study called "Kids and Digital Content." Some 31% of kids ages 6 to 10 now use digital-music players, with iPod as the brand of choice for 54% of them. Most cited the Nano as the version they use.

And loaded onto those digital-music players owned by youngsters ages 2 to 14 are an average of 125 songs, 10 TV shows and 15 movies, Ms. Frazier said.

Pod children
"By third grade, half of the kid population in grade school has an MP3 player," said Paul Metz, senior VP at C&R Research. There are a host of reasons why: a proliferation of parental hand-me-downs, more kid-friendly player choices at lower prices, and the long-held kid truism of wanting to be more like older kids and grown-ups.

"One of the biggest things we see in iPods is the hand-me-down iPod," said Forrester analyst James McQuivey. "Parents who got a video iPod when they first came out get new ones, but they've got an older one that works perfectly fine. The first target is the teen, but there's a good chance by now teens have a new one of their own. ... My expectation would be then the younger kids are getting them."

Lower prices and more choices players likely help spur those purchases. The video iPod Nano, for instance, costs just $149. Disney has a line of Mix Stick and Mix Max players with customized "Hannah Montana," "High School Musical," "Pirates of the Caribbean" and other covers ranging from $40 to $100. Sandisk also has a line of kid-targeted Sansa Shakers in bright blue and pink for $40.

"This was the second [holiday] year of kid-targeted MP3 players, and they were everywhere. They have a whole wall of them in Toys 'R' Us," said Mr. Metz, whose company does kid research through its KidzEyes service. C&R is readying a post-holiday survey, but its data from October show 40% of kids ages 6 to 8 have music-only players at home and more than 10% own music players with video capabilities.

With parental approval
That creates an opportunity for accessory makers, a market the Consumer Electronics Association estimates will top $1 billion this year, a 45% increase over 2007. And while accessory makers haven't yet flooded the market with "SpongeBob" iPod cases, there are ways to cash in. Mr. McQuivey said it could be that marketers are reticent about being seen as pushing products to very young kids, but they could do it with a positive parenting angle.

"Smaller headphones with limits on audio [volume] for children could be beneficial, as well as things like packaging appropriate music for children," he said. "I would expect that we'll see more things like that by next holiday." Apple already offers a free software volume patch for parents who want to set -- and lock in -- sound limits.

Don't expect Apple to actively court the kiddie market. Part of iPod's appeal to the young set is the fact that it is a glossy, grown-up device. "IPod has done a good job of not kid-ifying the market," Mr. Metz said. "Kids clamor for them because they make them feel cool and grown-up."

But when it comes to iTunes, Apple is bound to continue to offer plenty of kid content, building out an already extensive array of music and video content that includes Baby Einstein infant music; Nickelodeon preschool standards such as "Dora the Explorer" and "BackYardigans"; playground favorites "SpongeBob" and "Chowder"; and pre-tweeny Disney fare such as "Hannah Montana," "iCarly" and the "Jonas Bros."
Source: C&R Research's KidzEyes
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