Amazon and Apple: Think Of the Children!

Why Jeff Bezos and Tim Cook are the Ronald McDonalds of tech.
Posted December 5, 2012

Mike Elgan

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In the early 1960s, fast-food chain McDonald's hit upon a massively profitable long-term strategy: Get 'em while they're young.

The company started using the Ronald McDonald character in the early 1960s to attract very young children to the McDonald's brand. It was something of a marketing revolution at the time. Today, Ronald McDonald is the second most recognized character by American children -- second only to Santa Claus.

The company introduced Happy Meals in the 70s, playgrounds in the 80s, and online games and web sites in recent years. The company also invests heavily in establishing a presence in schools, funding McDonald's branded math, reading, PE, fund-raising and scholarship programs.

Together, these elements successfully forge powerful brand recognition, brand loyalty and brand preference among children before they're old enough to even know what marketing is.

It's a long-game strategy, which involves brand imprinting on children that results in loyal adult customers decades later.

As a result of this get-em-while-they're-young strategy, at least in part, McDonald's is the largest food chain in history, and serves about 68 million customers every day.

The lesson hasn't been lost on the technology industry.

Amazon Embraces the Ronald McDonald Strategy

Amazon announced a new service today called "Kindle FreeTime Unlimited," in which Amazon itself pays nearly all the costs for children to download content.

Parents with the Kindle Fire or Kindle Fire HD can sign up to receive unlimited books, games, apps, movies and TV shows intended for children between the ages of 3 and 8.

The cost? $2.99 per child (or $6.99 per family). That's the price for Amazon Prime members; non-members pay $4.99 and $9.99, respectively.

The first month is free.

For the starkest of comparisons, understand that Apple charges parents $3.99 just to rent one children’s movie, such as "Dr. Seuss' How the Grinch Stole Christmas."

Amazon charges a dollar less for (theoretically) hundreds of titles than Apple charges for one. The content is top-shelf stuff, too. Amazon's press release specifies children's titles from Andrews McMeel Publishing, Chronicle Books, DC Comics, Disney, HIT Entertainment, Houghton Mifflin Harcourt, Marvel, Nickelodeon, PBS, Reading Rainbow and Sesame Workshop.

Importantly, the service is designed to give kids a safe place (safe both for kids' minds and parents' wallets) to explore and choose content on their own.

Amazon hasn't revealed how much money it’s willing to lose on giving free content to kids. It's obvious that Amazon is losing money on the deal — probably a lot of money.

Apple's Been Doing It for Years

Amazon's aggressive targeting of children is hardly unique. Apple has been doing it for years, in all kinds of subtle ways.

Apple's nearly 400 retail stores, many in shopping malls, are like playgrounds for children. In addition to allowing pawing of ordinary merchandise on the big tables, Apple thoughtfully installs kids' tables at most or all of their stores, where children can play with iPads and develop multi-touch addition and brand loyalty. Here's a picture I took at a California Apple Store.

The strategy is working. Nielsen reports that nearly half of the children surveyed want a full-sized iPad and an additional 36 percent want the iPad mini or iPod Touch for the holidays. One third of kids surveyed also want an iPhone.

Apple also recently unveiled their broader education and book publishing strategy, which forgoes revenue in favor of targeting children.

The company aggressively sells iPads as textbooks into schools around the world, offering steep discounts on hardware to schools. Many educators and school boards complained that iPads were just too expensive, both because the initial cost was high, and also because the cost of them being lost, broken or stolen was high.

Apple's new iPad Mini offering, however, is cheaper and much more compatible with school use.

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Tags: Amazon, iPhone, iPad, Apple

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