The lowest-earning category on YouTube

Huge audiences, tiny cheques. Why children’s content earns a fraction of what it should and the plan to fix it.

Kids and families make up one of the most-watched parts of YouTube and one of the worst paid. The big accounts pull billions of views a year, the engagement charts look spectacular and yet the money per view stays stubbornly low.

I caught up with Gregory Dray to understand why the mismatch but more importantly what he plans to do about it. Dray co-founded the kids media company Animaj, he chairs the new Hasbro and Animaj venture Lumee, and he spent years before that running YouTube Kids globally, so he has made this argument from inside the platform and outside it. He puts kids and family at more than 15% of all viewing on YouTube. This pretty much tracks with every single report we get from Precisify which shows YouTube as the go to platform for kids aged 2-12. In their latest research, YouTube sits n°1 at 65% in the UK and Germany, 66% in Australia and 75% in the US.

The timing of this interview is no coincidence. This week, the kids content business gathers in the Alps for Annecy, the animation industry’s biggest week of the year, while the brands and agency that can pay for the advertising around that same content take over the Croisette for Cannes Lions. How can we ensure that the people who make what children watch and the people who buy the ads beside it sit at the same table? Lumee is here to create that opportunity.

Today at a glance:

• What the Disney deal gives away

• Privacy became the alibi

• The reservation bet

• What happens off YouTube

• The grind that has to pay

What the Disney deal gives away

Disney Advertising and Lumee stroke a deal to have the JV representing a selection of family inventory across roughly 65 Disney YouTube channels in the US, the first outside name Lumee has taken on beyond its two founding partners. Put the three portfolios together and you reach more than 100B YouTube views across 2025 alone.

What a get for Lumee and what a fascinating move from Disney. Disney runs one of the biggest ad sales operations in media. It’s 2025-26 upfront closed with sports advertising alone near 4 billion dollars and streaming above 40% of total volume, on top of a direct line to every major agency on earth. It still decided that a fifty-fifty startup, chaired by the former boss of YouTube Kids, could sell part of its YouTube family inventory better than Disney could in house. Companies rarely hand out work they find easy.

“Kids’ and family content is currently the most undervalued real estate in the digital world.”

Gregory Dray, speaking to Variety

Disney’s own framing stays diplomatic, all about trust and reaching families wherever they watch, which is exactly what you would expect a company to say while admitting the in-house route was not working.

Privacy became the alibi

The privacy constraint is real. In 2019 Google paid the FTC 170M$ to settle charges that YouTube had collected data on children and the platform then made creators label anything aimed at kids as Made for kids. That label switches off personalised advertising, comments and data collection. Disney paid 10M$ in 2025 to settle claims it had mislabelled kids videos across channels including Pixar and Disney Animation. Nobody serious argues that small children should be tracked and targeted.

The cost of that switch landed fast.

“After January 2020, YouTube was forced to change practices and stop doing targeted advertising for kids’ content, which caused the money for kids’ creators to fall overnight by 50%.”

Gregory Dray (from our conversation, translated)

So the kids business moved to contextual advertising, which places ads by what sits on screen rather than who watches. Lumee is built for exactly that, COPPA compliant and contextual by design. That part of the story holds up.

Then Dray’s argument turns. Privacy explains why you cannot run behavioural targeting against a six-year old. It does nothing to explain why a seller cannot move premium contextual kids inventory cleanly, above all on connected TV, where the higher CPMs live. That is a product and engineering job and by his account YouTube keeps leaving it half built with promised fixes for selling kids inventory on the big screen that arrive every six months and never quite ship.

The reason sits in plain view on Alphabet’s own balance sheet. The company plans to spend between 175 and 185B$ on capital projects in 2026, most of it pointed at AI. Anything outside that priority waits and the unglamorous plumbing of kids monetisation sits a long way down the queue. Line up the numbers and the indifference makes cold commercial sense. YouTube’s advertising business earned around 40B$ in 2025. Dray puts the entire global kids advertising market near 4B$. A platform that size has little reason to grind through hard, constrained, low-margin work for a prize a tenth of what it already banks.

The reservation bet

So what is the alternative Dray is selling. Lumee does no auction at all. Every placement is booked in advance, the way television advertising worked before programmatic took over and Dray is rebuilding that old model inside YouTube. The inventory goes out as premium, brand-safe and contextual, placed by what is on screen and around which shows, with visibility down to the individual video and channel.

"We take the old linear model and copy and paste it into YouTube."
Gregory Dray (from our conversation, translated)

The bet underneath is a price bet. Dray reckons booked, verified, premium placement is worth a multiple of cheap auction inventory and he puts reservation at three to four times auction rates during base periods. The catch is that he has to talk the market into it. Agencies have spent years chasing Peppa Pig and Disney audiences as cheaply as the auction allows and Lumee turns up asking them to pay a premium for control and context instead. That is a re-education job and re-education takes time.

Two hard limits shape how far the model can stretch. The first is partner sales rights. Lumee can only represent channels that already hold the right to sell their own YouTube inventory, which the Disney, Hasbro and Animaj brands do. Plenty of enormous channels do not, so even when owners come knocking, YouTube’s own rules keep them out. Dray points to El Reino Infantil, one of the largest Spanish language kids networks anywhere, as inventory he simply cannot touch. That ceiling doubles as a feature, since he is adamant Lumee should stay a curated house rather than swell into a catch-all network.

"We will selectively represent ad sales for premium third-party brands ... to avoid becoming a broad ad network."

Gregory Dray (from our conversation, translated)

The second limit is measurement and it is the one that matters most. By his account, Nielsen, Comscore and Kantar can measure a publisher’s reach against households with children on every major platform except YouTube, because YouTube will not share the data. A category that nobody measures cleanly gets sold cheaply, every time. So part of the build is a set of COPPA-compliant measurement tools.

What happens off YouTube

YouTube dominates the story but Lumee also sells across CTV, FAST and AVOD and the ecosystem is not good at selling against kids content. The audience is valuable and they know it but kids and family sits awkwardly inside a general ad operation, half understood and easy to get wrong. A lot of platforms are nervous about the category, worried about the faux pas of an ad landing beside a preschool show where it has no business being. That caution leaves money on the table. A specialist who takes the whole category off their hands, with brand safety built in, solves a problem they would rather not own. I would expect platforms and channel partners are already lining up at Lumee's door.

Running a single campaign across YouTube, FAST and AVOD is hard though because the systems do not talk to each other and FAST does not pass through Google Ad Manager the way YouTube inventory does. Lumee had to build its own ad serving and order management to stitch the environments into one buy.

The grind that has to pay

The question is whether enough of the market agrees that premium kids attention is worth booking and paying for. Dray’s early read is that the demand is real. The IP he represents is close to unavoidable, so the meetings come easily, and he says parts of the market had been waiting for exactly this, a single serious front door to premium kids inventory. Curiosity is not committed budget though and turning one into the other is the work of the next year or two. For now Lumee is a proof of concept, three blue-chip portfolios and a model it still has to validate before it scales.

He is clear-eyed about how that happens. He describes two camps among the companies in the ecosystem. One wants to flip the table and force a wholesale rethink of the economics, which he is certain will never come. He sits in the other, grinding out small wins from inside the system he used to run, one product fix and one agency conversation at a time. There is nothing glamorous about it and he thinks it is the only version of this that is real.

The stakes give the grind its urgency. Kids and family pulls more attention than almost anything on YouTube and converts the least of it into money and money that never arrives cannot fund the next generation of shows. Every year the gap holds, the audience drifts further onto a platform that monetises a sliver of what it could, while the companies making the content those kids actually watch keep subsidising the reach.

Whether Lumee changes that will not be settled by a press release. It comes down to whether a media buyer in London or New York will pay three times the auction rate for a Peppa Pig pre-roll because they can finally see, channel by channel, what they are buying. That is the sale Dray has set himself. He spent years learning how YouTube says no. He is betting he now knows how to make it say yes.

That’s it for today.

See you on Thursday for another edition of Streaming Made Easy.