Arizona influencer parents would have to share YouTube money with kids in videos under new bill

Parents who are making money off their kids through YouTube videos may soon be required by Arizona law to set aside some of that cash for them.

Without dissent, the House Commerce Committee on Tuesday approved legislation to require that half of the revenues generated be put into special trust accounts, off limits to the parents. And the children can access those dollars on turning 18.

And it even permits those who are at least 13 years old who are producing their own videos and have set up their own revenue stream to keep all the money themselves.

Rep. Julie Willoughby said the legislation is designed to deal with the fact that online videos by “influencers” have spread rapidly. This includes not just those who are compensated by platforms like YouTube based on the number of views but also arrangements with third parties who provide cash when their products are featured.

The idea by the Chandler Republican is not new. In fact, it already exists in federal law for commercial productions like movies and TV shows through something called the Coogan Law.

Named after child star Jackie Coogan who said his mother and stepfather spent all the money he earned, it requires 15% of what’s earned to be put into a “blocked account,” inaccessible to either the parents or the child until age 18.

HB 2192 has the blessing of Google, the parent company of YouTube. Lobbyist Colin Larson pointed out to members of the House Commerce Committee that this doesn’t apply just any time someone just happens to put up a video featuring a child.

“These are primarily children and their adults and legal guardians that are working as influencers,” he said.

In the case of YouTube, the company offers a share of the revenues it generates from how many times someone views a video where an advertiser wants to place an ad.

“But you also may be getting a sponsorship deal to feature a product,” Larson said.

One of those who has gained national attention is Ryan Kaji who has starred for years, beginning at age 3, in “Ryan’s World.” Produced since 2017 by parents Shioh and Loann, it featured the boy opening boxes and playing with toys — with payments to the family by the makers of those products.

At one point, according to media reports, his channel had close to 40 million subscribers. And Forbes last year listed him as one of the “top creators” with earnings of $35 million.

What this legislation would do, Larson told lawmakers, is set up some rules for how this would occur in Arizona in the future.

“Once a parent has said, ’Yes, Hasbro, we’re going to take $10,000 so your Peppa Pig toy can be unboxed in this very popular channel,’ then, when that money is given to that parent ... it’s just incumbent that once that money is transferred to the parent that the parent has to then, under the terms of the trust, put that 50% aside into that trust,” he said.

What the law would do, Larson said, is enshrine all this into state law.

He said that other states like California already have set up similar requirements.

“This law, this model legislation, has actually already been passed in Utah, Illinois, Arkansas,” Larson said, with Colorado lawmakers scheduled to hear the idea. “I suspect this very much a national standard, which is the idea that there’s consistency across the states.”

But Larson also made it clear that it wouldn’t be Google, YouTube — or any other platform — that would be responsible for policing all this to ensure that kids get what they are due.

“It would fall on the content creator — in this case, the parent — to understand that this is an applicable law,” he said, and is triggered when certain thresholds are met.

Under the terms of HB 2192, the mandate for a set-aside would kick in when at least 30% of the content created by someone in the prior month includes the likeness, name or photograph of the child. There also are some financial conditions, like a content creator gets at least 10 cents per view and had made at least $15,000 from the video in the prior 12 months.

“This is not going to capture like a casual person who created a single piece of content that went viral,” Larson said.

“This is somebody who is really working at this several hours a week,” he said. “This is not something that you would accidentally fall into.”

There are some other provisions beyond compensation.

One spells out that, at age 18, children can decide they no longer want the videos that were taken of them to be publicly available and require that whoever owns the content take them down.

Under the terms of the bill, that request would be made to the hosting platform who would inform the content creator. And if that person doesn’t respond, the website could remove it and the person in the videos could sue.

But there is an exception: The online platform could ignore the request if it determines that the video content “is sufficiently newsworthy or of other public interest that outweighs the privacy interests of the minor involved.”

Finally, there’s a whole section to prohibit anyone from benefiting from knowingly or intentionally producing images of a minor “with the intent to sexually gratify or elicit a sexual response.”

“This is an unfortunate dark side of child influencing,” Larson said.

What it involves, he explained are videos that do not cross the legal line into pornography.

“This would be something like a 14-year-old in her bathing suit — but clearly designed to appeal to prurient interest,” Larson said. And the law would give the affected minor the right to sue for damages.