The BBC is set to announce £34 million worth of new incentives in order to win back kids from streaming services like Netflix and Amazon Video.
Falling viewing figures of children's TV has forced the Beeb to assess kids' viewing habits and it has realised that they no longer sit and watch linear programming.
It will therefore "respond" by investing heavily in online entertainment, including video, live online programme extensions, blogs, vlogs, podcasts, quizzes, guides, games and apps.
The £34 million of new investment, which will be on top of existing budgets for CBBC and CBeebies programming, will be spread across the next three years.
A BBC source explained to BBC.co.uk that the rise of US technology firms and streaming companies has forced the broadcaster's hand: "The way children and young people are watching and consuming programmes and other content is changing fast, and the BBC needs to respond," he said.
"This investment will mean we can reinvent how we serve our youngest audience in the years ahead, while continuing to produce outstanding programmes on CBeebies and CBBC.
"Investment in British content - particularly for the young - is vital, unless we want more of our culture shaped and defined by the rise of West Coast American companies."
It is thought BBC iPlayer will become even more key in delivering new kids content.