Mid-year 2014 Update on the Parental Controls Software Market

by | Jul. 17, 2014

The Hazards of the Internet to Youth

In January, I wrote about emerging trends in protecting the online safety of children. In Parents, Kids, and the Internet: The Evolution of Online Protection Tools, I introduced several solutions in a category of products that I term “social networking and communications intelligence tools.” Instead of just filtering and blocking kids’ access to objectionable or dangerous websites (or overwhelming parents with mountains of data generated from keystroke logging or other spying software), these tools analyze as much of a child’s online activity to determine if he or she may be placed in compromising situations or in potential trouble.

Products from companies such as ContentWatch (Net Nanny), PureSight, uKnowKids, United Parents Online (UPO), and others, use the interactions kids have on social networks or through communications apps (WhatsApp, for example) provide a more comprehensive look at the online and mobile activities of children to give parents a clearer picture of what’s happening in their kids’ lives and to make decisions for how to address potential hazards. The core mantra of many of these solutions is that they are intended to “keep good kids good.” They are not intended to try to protect the child from everything they may encounter online, but instead are meant to help parents to have conversations with their children about online threats.

My post from January included a number of statistics that point to some of the inherent dangers facing kids online. From attempting to access inappropriate or dangers websites (Kaspersky Lab), to cyberbullying (AVG and Plymouth University), and potentially coming into contact with nefarious individuals (F-Secure), parents do have every reason for concern over what is happening to their kids online. In the meantime, youth are ever-more capable of hiding their online activity from parents, according to McAfee.

New Data Points to the Increasing Threats to Children Online

Studies conducted in 2013, as seen above, already generate significant concern about the perils of the online world for today’s youth. However, new information from some of the world’s leading Internet security vendors indicate that the online world is becoming a more dangerous place for children.

  • McAfee, for example, released findings from its annualTeens and the Screen study: Exploring Online Privacy, Social Networking and Cyberbullying report. The company reports that 87% of youth have witnessed cyberbullying versus last year when 27% of youth witnessed cruel behavior online.
  • AVG Technologies reports that parents are being forced to have the “facts of life” conversation with their children about five years earlier than when they were growing up. In fact, 50% of parents remember that it wasn’t until age 15 until they had the conversation with their parents. According to AVG, the Internet is a clear driving force behind this change, as children are exposed to subjects such as sex at a much earlier age.
  • uKnowKids recently reminded parents about the risk of “geotagging,” the embedding of location information into photos or posts made through social media sites. Using the geotags, uKnowKids notes, anyone who views the picture online can access that embedded information with a few clicks and find out exactly where children may have been, presenting a potential hazard to them.

Where is the Market Heading?

I’ve briefed with more than a dozen Internet security and reputation management companies – along with other experts and advocates for online safety. Most recently, I’ve had discussions with such companies as ContentWatch (Net Nanny), F-Secure, McAfee, Qnary, and SecurityCoverage. Most executives in the area of Internet security software agree that these solutions will evolve to embrace more social network monitoring functionality. However, they are nearly unanimous in their agreement that it is extremely difficult to sell parental controls software as a stand-alone product. Today, the use of parental controls software is perhaps 2-4% of the potential market, according to multiple sources I’ve interviewed. Instead of attempting to sell specific parental controls software, most companies have taken the approach of incrementally adding parental control functionality to existing Internet security suites. One of the biggest trends that we’re seeing today is the inclusion of broad functionality into today’s Internet security products (including antivirus and privacy protection) and the ability by consumers to purchase one suite of products to cover all of their digital devices (PCs/Macs, smartphones, and tablets).

Companies such as uKnowKids, however, show the potential for a parental intelligence solution – one that delivers both information and analytics to help parents understand the way their kids use technology as well as the actual content of what they are sharing online – to be successful as a stand-alone product. The company recently closed on $2.5 million in funding and revealed that it is experiencing a quarterly growth rate of nearly 75% and has more than 30,000 subscribers. Using the monthly subscription cost of $9.95 that Comcast charges for its Family Sense® service (that is powered by uKnowKids), that is an annual revenue run of about $3.6 million dollars. What could be the total worldwide market for parental intelligence tools? I’ve calculated that revenues could reach around $450 million by the end of 2018.

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