Starting Jan. 1, YouTube started treating content aimed at children differently from everything else uploaded to the world’s biggest video site.

The changes are supposed to make YouTube a safer place for kids. The big problem is, nobody is sure what “child-directed content” means exactly, and producers and creators are worried they could be socked with thousands of dollars of fines or other penalties depending on how the rules are interpreted. Other observers warn that the rules will have a chilling effect on YouTube content for tykes — and even videos aimed at older audiences, if they’re popular with kids. Here’s an explainer of the situation.

What are the changes?

Beginning in January 2020, YouTube will dramatically curtail the data it collects for videos marked as “made for kids.” That will disable numerous features — including the ability to serve targeted advertising on those videos. Other features that depend on user data will be disabled, including comments, channel notifications and “save to playlist” and “watch later” tools. YouTube also will exclude videos tagged as made for kids from search results.

Why is YouTube doing this?

The changes stem from Google’s deal with the Federal Trade Commission and the New York attorney general to settle allegations that YouTube violated the U.S. Children’s Online Privacy Protection Act. The law bars internet companies from collecting data from kids under 13 — something to which YouTube turned a blind eye for years, critics charged. Google also paid a $170 million fine under the settlement.

What does this mean for creators?

YouTube is forcing all creators, regardless of location and whether or not they actually produce content intended for children, to designate whether their videos (or their entire channels) are made for kids. YouTube says it is using artificial-intelligence algorithms to check whether creators have correctly labeled their content and that it might override those settings “in cases of error or abuse.”

What are the potential penalties?

YouTube is putting the burden of complying with COPPA on creators. If the FTC determines a channel has violated the law (by mislabeling its YouTube content), civil penalties of up to $42,530 per violation are allowed, although the agency says it “considers a number of factors in determining the appropriate amount.” In addition, YouTube says it may take “action” against violators, including account termination.

What will be the impact on content producers?

YouTube’s new COPPA-compliance rules have led some creators – fearful of potential fines and projecting massive advertising-revenue losses — to shut down. Socratica Kids, a small channel that produces educational science videos, in November announced that it was ceasing operations because it would lose upwards of 95% of its ad income under the new YouTube rules. “The most plausible scenario is you’re going to see tens of thousands of YouTube creators just go away,” says Jim Dunstan, general counsel at technology policy think tank TechFreedom.

What about big media companies that produce kids’ content?

The likes of Disney and ViacomCBS have armies of lawyers to navigate YouTube’s new requirements. But even for them, Dunstan says, there are gray areas in terms of whether content is or isn’t child-directed under the FTC’s definition: “It’s all going to be in hindsight what some bureaucrat decides.” 

Some producers are avoiding projects that could be seen as attracting an under-13 crowd. New York-based digital media firm Believe Entertainment recently inked a deal with ex-Nickelodeon exec Keith Dawkins to develop children’s programming. Dan Goodman, one of Believe’s co-founders, says that because of the YouTube rules, the studio for now is focusing on “stuff that’s more tween-oriented and older” because “you don’t want it to be misinterpreted.”

What’s the reason for the uncertainty?

The FTC provides only general rules of thumb about whether content is “directed to children” and thus subject to COPPA. The criteria can include the use of animated characters or “child-oriented activities and incentives” or the ages of people in the video. Many, including Google, feel the guidance is inadequate. In a Dec. 9 filing, the company said that “the current ambiguity of the COPPA Rule makes it difficult for companies to feel confident that they have implemented COPPA correctly.” Google specifically called on the FTC to spell out lines of demarcation for content aimed at general audiences, mixed audiences and children, as well as codifying exceptions for educational content providers.

How should creators proceed at this point?

YouTube has advised creators to consult with a lawyer if they have questions about COPPA compliance. However, even attorneys who have worked in the area for years say it’s not a clear-cut process. “I’m relatively experienced, but it’s still a judgment call — it’s highly subjective and could go either way,” says Michelle Cohen, a partner at Ifrah Law who chairs the firm’s data privacy and cybersecurity practice. In terms of designating whether videos are for under-13 kids or not, she says, “I would definitely keep records, to make a paper trail to say things like ‘My videos use vocabulary at a higher level’ or ‘They don’t use music for young kids.’”

Amid gloom-and-doom predictions, not everyone in the kids’ content space foresees YouTube’s new rules derailing their businesses. Pocket.watch, a digital studio that focuses on children 2-11 and works with YouTube creators including top kids’ channel Ryan’s World, will not see big drops in revenue because the company is not solely dependent on ad sales and can sell context-based spots, says founder-CEO Chris M. Williams. “We will not have a crisis of audience,” he adds. “It’s not like kids will up and leave YouTube.”

Pictured above: Ryan Kaji from YouTube channel Ryan’s World