Earlier this summer, the US Federal Trade Commission began holding private talks with YouTube officials, part of a burgeoning investigation. The video service stands accused of breaking laws overseeing kids’ web habits, placing a massive library of media and accompanying revenue in jeopardy. Neither YouTube nor the regulators have discussed the talks publicly.

Yet despite the secrecy, a small British marketing firm started emailing some marquee YouTube advertisers about the developments. Reports indicated that the FTC would hit YouTube with a record fine and force its operations to change — something, the emails noted, that would ‘be of interest’ to YouTube’s sponsors. “Regardless of what size the fine actually is, it represents a shift in the world for children’s digital privacy,” read the message.

The emails were from SuperAwesome Ltd. Toy makers, animators and other brands pay the company to place online ads or access tools like the start-up’s ‘safe, moderated’ system for internet comments. In July, SuperAwesome added another offering: a video service, called Rukkaz, that works much like YouTube. Amateur broadcasters upload videos, sponsors back them and kids watch. Only the start-up pledged to work with only hand-picked broadcasters, and pitched the service as a way to abide by privacy laws and avoid the demented footage lurking on the open web.

“This is something that Google and Facebook, and arguably Apple, should have been doing for the past five years,” said Dylan Collins, SuperAwesome’s chief executive officer. “And they haven’t.”

Privacy practices

Waves of new media darlings have tried to unseat YouTube, with no success. But Collins is one of several entrepreneurs trying to strike while YouTube is in turmoil. The video behemoth, owned by Google, has earned a reputation as a Wild West of media, a place where young viewers have too readily stumbled on footage of crass humour or bloody violence.

Lawmakers have asked about this, part of the scrutiny of the privacy practices and dominance of big tech. The FTC is probing whether Google violated the Children’s Online Privacy Protection Act (COPPA), which prohibits tracking the personal information of minors under thirteen. YouTube’s frequent tweaks to its all-powerful algorithms and ads policies have left video creators disgruntled. A handful of upstarts are hoping this momentum will help their cause. They’ve roped in venture financing, licensing deals and customers with the promise of creating kid-safe internet real estate .

Hunting for alternatives

The FTC is inadvertently playing a role, too. Uncertainty over the case is producing panic in parts of the YouTube community, prompting some stars to hunt for alternatives. News reports surfaced that the FTC may force YouTube to move all children’s videos to its Kids app or cut them off from ads. YouTube has offered no public statement on the issue and rumours have filled the vacuum.

“No one really has a sense of what is going to happen,”said Michael, who runs KidCity and two other YouTube family channels. He is one of more than 150 YouTubers jumping to Rukkaz. He isn’t moving off YouTube, but will cross-post select YouTube clips with the start-up, which will share ad revenue. He asked that his last name not be revealed to protect the privacy of his two children.

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