I need to start off with saying that I'm not a copyright lawyer and none of this is legal advice. My understanding though is that my subscriptions allow me to play music for my family and friends. I don't believe that anything I'm doing is crossing the line into a public performance even though some dance parties are done in front of the house and the music is loud enough for some neighbors to hear. I'm not charging for attendance and the primary audience are invited people.
Something you should decide on early is the content of the music you are going to play. I started when my kids were 4 and 2. G ratings were the rule. Over time, the music has grown up a bit, but my dance parties are still a PG affair for the most part. At 7 and 9, PG-13 will be creeping in soon, but I'll still be pretty protective. I won't play music about drugs, that glorifies violence, or encourage doing dumb things.
You need to make the decision of what music is okay for your dance parties, but keep in mind that you aren't playing just for your kids. Hopefully pretty soon, you're playing for their friends also and so make sure that the choices you make are appropriate for the larger group you might play for.
One thing you rarely find in my playlist is KIDZ BOP. I have a strong opinion that it isn't a good source of kids music. For a long time, I was fine with it and then they released Wings and Pizza. I believe that the music we expose our kids to is the music they will eventually like later in life. Their tastes will grow and change, but the foundations of music start young. If you're exposing them to the beats of Wings and Pizza, some day they are going to hear the original and it's going to be very familiar to them and I'm not okay with that. Ever since, I've avoided their catalog.
Great news, you likely already have a music service you can use to get started. If you have any type of an music service (Spotify, YouTube Music, Amazon Prime Music, Apple Music), you should be able to get started. Don't force this on your kids, but pay attention, when they start dancing, what music is playing. Create a playlist and add those tracks. Eventually you'll start to get a list of 10 or so tracks and can try them out to see if you play them, which ones will they dance to again.
This doesn't apply to everyone and their kids, but for many, the music the kids like isn't exactly their parents favorite and vice-versa. If you want to be successful, you're going to listen (and hopefully dance) to some music that you aren't a fan of, but your kids love it and even more importantly, they love dancing to it.
Sometimes you find that amazing track though, you love it, your kids love it, and everyone loves dancing to it. Make a special playlist just for those tracks and put in the effort to find more of them. Often I'll use the song they like as a seed for starting a radio station (YouTube Music lingo) and let that play when the kids are nearby. It's a great way to let them here different songs and have a better chance to like them (Seriously this is how radio stations play new tracks)
Since you're likely doing the same thing I was of just playing the songs on your phone, focus on songs that are shorter. A 6 minute song may be incredible, but when your dancing to it and the 3rd of 5 choruses start, it definitely starts to get a little less fun to dance to. Two 3 minute songs can fill the same time but help keep the energy up.
Also recognize that you don't have to play the song to the end. If no one is liking it, move on to the next song. Try and remember what songs aren't working and if the same song doesn't work several times, remove it from your playlist and find more. The effort to find music to play has been an ongoing effort ever since this started. I have the original "Kids Dance Party" playlist that I built up to 60 tracks. Then came "Kids Dance Party 2023" and a special Halloween playlist for trick or treaters.
Here's some starting points that you can try based on your kids ages. These hopefully give you an idea of where to source your first songs from, but are by no means exhaustive. Anytime you're out and about, you kids are likely hearing music so keep an ear open at all times.
You probably control a lot of the media that your kids see at this age which gives you a leg up. A lot of kids characters have albumbs of common songs if you search for them in your music catalog. Sometimes these are songs from the show or from a move that was done. There is an advantage of having a character the kids know singing the song to get them in the mood.
Between 6 and 10, your kids likely started watching movies and soundtracks can be an amazing source of new dance party music. Trolls, Frozen, Moana, and Ugly Dolls all had good representation in the original Kids Dance Party playlist. These also follow the rule that not all songs your kids love are good to dance to, but most kids movies have at least one or two great songs to dance to.
There are multiple high school dance DJs who upload videos to YouTube of their shows. They are cut up so you get an idea of what the evening was like without hearing the entire songs that are being played, but this is exactly what we want, a quick list of songs that our kids might be hearing elsewhere that we can pick from. Be aware that often middle/high school dances cycle through multiple genres trying to please everyone. The DJ isn't expressing an opinion about the music they are playing, just playing popular songs in each genre.
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