April 9th, 2007

Sites Aimed at Preteens Gaining in Popularity

By Tricia Bishop
Baltimore Sun

For a stuffed bulldog, Calvin has it pretty good.

He lives a full, if virtual, life and has a pad decked out to his tastes, says owner and decorator Jake Reynolds, a 9-year-old.

Six months ago, the 3rd grader got sucked into Calvin’s world and hasn’t left it since. He can’t.

Once Jake used the secret code that came with his store-bought bulldog to create an online version at Webkinz.com, he committed to feeding and shopping for the pup regularly while interacting with other kids and their virtual pets on the Internet.

“You have to play it mostly every two days or every day, because if you don’t then their health meter goes all the way down, and they’ll get sick,” Jake says matter of factly. “I do it just about every day because I just really, really like it.”

Webkinz.com is one of a growing number of social-networking sites aimed at preteens, many of whom have watched older siblings interact online at places like MySpace.com.

Such “tweens,” roughly ages 6 to 12, now spend as much as $40 billion per year, up from $6 billion in 1989, and help their parents decide how to spend another $200 billion annually, according to a PreteenPlanet.com survey. That makes them an attractive demographic, particularly in the online world where, until recently, they had been largely ignored.

“This is an underserved audience,” said Anastasia Goodstein, who last month published a book on children and the Internet called “Totally Wired: What Teens and Tweens are Really Doing Online.”

“I think you’ll continue to see new companies pop up in this space.”

Creators of such sites say they are teaching kids computer, financial and social skills while providing a safe, monitored environment in the wilds of the Web.

But critics say they’re just teaching consumerism, with a materialistic focus on shopping, even though the products and the funny money used to buy them exist only online.

A Webkinz primer, for example, points out that “Everyone enjoys a little retail therapy.”

That site, which local retailers say really took off big during the past few months, is a 2-year-old venture from Canadian toymaker Ganz. It allows kids to mix and mingle with other kids, play games, make movies, read a daily newspaper and spend earned “KinzCash.”

It has thousands of children like Jake and his siblings, 5-year-old Sarah and 8-year-old Nicholas, hooked with its double threat of a cuddly stuffed animal (available from specialty retailers) and an accompanying code, which lets children create animated versions of their pets on the Internet and furnish their virtual homes.

“It teaches them responsibility because they can earn money through jobs [online],” said Jake’s mom, Kim Reynolds, whose kids use their allowances to buy Webkinz or get them as holiday gifts.

Much like the Beanie Babies craze of a decade ago, the $8-$13 Webkinz are selling faster than Ganz can make them. One eBay auction is offering three “retired” Webkinz for $500 a pop.

Unlike Beanie Babies, their allure is less about the product than the Internet connection they offer.

Among the most popular tween sites is ClubPenguin .com, which was launched in October 2005 by Canada’s New Horizon Interactive. There, animated penguins waddle in and out of igloos, controlled by kids.

At Whyville.net, virtual citizens fly hot air balloons, ostensibly to learn vector math, chat and test drive a Toyota every now and again.

And last month, at Nickelodeon’s Nicktropolis.com, kids could participate in an online after-party timed to coincide with the network’s Kids Choice Awards show.

“It’s fun; you can talk to your friends on the Internet,” said Ellicott City, Md., 5th-grader Grant Stadler.

He just signed up for Club Penguin early last week, at the urging of his buddies, and he already is hooked, spending his afternoons sled riding with his friends or playing an online version of Connect Four with his self-created animated penguin.

The sites generally make their money in one of three ways: Webkinz sells its plush animals, backpacks and purses; Whyville.net uses sponsors like Toyota and Scion to bring in cash; and while Club Penguin is free for basic play, a $6 monthly subscription is required for the bells and whistles.

None of the companies will say what they’re earning, though they all have said their revenue rises each year.

“Chatting and gaming are the two most popular things online,” said Club Penguin spokeswoman Karen Mason. The site was viewed by 3.2 million people in February, according to Nielsen//NetRatings.

Mason defends the commercial aspects of Club Penguin by pointing out that the site doesn’t allow marketing even though it promotes shopping, a reality in today’s world, she said.

“We live in a commercial society,” she said. “I think really we’re providing a safe environment for them to practice safe money-management skills.”

Eight-year-old Whyville.net, on the other hand, does allow marketing. Its sponsors include NASA and Toyota, which has sold more than 5,000 virtual cars to kids on the Web site and offers pretend credit for those who haven’t earned enough online cash. Though the transactions aren’t real, marketing analysts say they could translate to sales later when the kids reach driving age.

“All of us are blasted with dumb marketing, but we don’t do dumb marketing,” said Jim Bower, the founder and chief executive of Whyville’s California parent company, Numedeon.

He also is a professor of computational biology at the University of Texas, San Antonio, and said his site is more about education than anything else. It teaches kids about nutrition, gives them science lessons and throws in a little math.

Parents are still leery of the social nature of most virtual worlds, however. The preteen-focused sites take extra precautions to keep kids safe by limiting the kinds of messages they can send, encouraging self-policing, and monitoring interactions.

“Parents are actually happy to allow their kids to go to social sites sponsored by well-known companies,” said Emily Riley, an analyst with Jupiter Media Research. “They know this is a trusted media outlet.”

Ganz makes more than 40 Webkinz and about 25 smaller versions called Lil’ Kinz. Each comes with a year of online access, though that can be renewed if kids buy another toy, if they can find them.

Rick Sharpe, who owns several Baltimore-area Hallmark shops with his sister, said he has $95,000 worth of Webkinz on order but receives only a dozen or so at a time to sell at his stores.

“In a way it’s a nightmare,” Sharpe said. “It used to be Beanie Babies; now it’s Webkinz. You’re always running to the phone” with people calling to see if the animals are in stock.

Webkinz spokeswoman Susan McVeigh said the company was “scrambling” to get inventory levels back on track after having been “caught with a much, much greater than anticipated” demand.

“We just saw the opportunity to incorporate the traditional plush-pet component with something that kids like to do, so you talk to a new generation of fans,” McVeigh said. “You’ve got to appeal to kids where they are, and this is where they are.”

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