This article investigates the changed market conditions for production of films for young audiences in the on-demand age. More precisely, I analyse how the public funding of films for children and youth in Denmark has undergone significant change in response to intensified competition and waning audience interest. From the outset of the Commissioner’s Scheme for films for children and youth at the Danish Film Institute (DFI), the state subsidized main financier in the national industry, the institution has changed away from selective funding based on cultural evaluation criteria towards audience-centric funding based on market orientation and data-driven audience insights. The DFI’s objective is to reach young audiences more precisely with films that are relevant to them. Yet, one of the implications so far of this practice has been that funds earmarked by law for films for children and youth are spent on films for adults, with significant ramifications for domestic film culture for young audiences.