YouTube’s biggest kids show is about to take over streaming services

Although The Umbrella Academy was all over Tumblr and people couldn’t seem to stop bingeing Cobra Kai and Lucifer, one of Netflix’s most-watched shows in August was a three-episode children’s program called Cocomelon.

Cocomelon, for those without children or younger siblings, is one of the most popular YouTube channels in the world with nearly 100 million subscribers. The studio creates videos for young children that star an array of animated characters singing lullabies and telling kid-friendly stories. Over the course of one month, Cocomelon’s videos garner more than 3.5 billion views — more than any other YouTube channel and more than several content providers like Netflix and Disney Plus combined, according to Bloomberg.

The entertainment channel is now the keystone of a strategy by its owner, Moonbug, to dominate the massive and rapidly changing children’s programming space. And so far, it appears to be working.

“Most of our shows have a big audience on YouTube,” Andy Yeatman, head of Moonbug’s US operations and a former Netflix executive, told The Verge. “In fact, we have the biggest audience on YouTube, but a key part of our strategy is to work with other platforms — and Netflix is a very important one.”

In June, three-hour-long Cocomelon videos debuted on Netflix for the first time, and they quickly became enormous hits. Cocomelon became the 10th most-watched show on streaming services in the United States (including Netflix, Hulu, Disney Plus, and Amazon Prime Video), racking up more than 336 million minutes during the last week of August, according to Nielsen, which ranks streaming shows by popularity weekly. It was the only show with less than 10 episodes to make the cut and the only show predominantly targeted at preschool-aged children. It has since been a constant on Netflix’s top trending row.

Although Nielsen’s ratings are sometimes contested by Netflix and only cover the US market, what’s clear from the inclusion is that YouTube’s biggest channel also works on other platforms. Moonbug announced that as of October 13th, Cocomelon was one of the three most-watched shows on the streaming service in the United States, according to the company.

Moonbug formed in February 2018 and quickly bought up popular YouTube channels in an attempt to assemble a sort of next-generation streaming-focused kids network. It acquired popular names like My Magic Pet Morphle and Dr. Poppy’s Pet Rescue, and recently, it added Blippi, a popular children’s entertainer, and Cocomelon. Although the terms of Cocomelon’s purchase were not disclosed, the acquisition came alongside an additional $120 million in funding for Moonbug. When combined, Moonbug’s channels have 235 million subscribers and generate more than 7 billion views a month.

Moving into Netflix offers Moonbug the opportunity to find an untapped audience. YouTube and Netflix have routinely over the last couple of years ranked as the top two platforms kids ages five to 12 spend time on, with a recent study from Morning Consult finding that 65 percent of kids that age pick YouTube as their primary source of entertainment, and 55 percent pick Netflix. Their popularity may be contributing to a decline in traditional kids TV viewership, with Nickelodeon losing 44 percent of its overall viewership since 2015, according to a Forbes report.

Cocomelon and Netflix’s partnership seems fruitful for both parties. Around 60 percent of Netflix’s audience around the world is watching children and family-oriented content, Melissa Cobb, Netflix’s animation head, told The New York Times last year. Netflix is spending billions of dollars on building up its children’s programming library. Ted Sarandos, Netflix’s co-CEO, recently told Variety that Netflix is planning to release six animated films a year — more than Disney or any other competitor. The company eventually wants to have more original programming than licensed titles, but for the time being, it needs to license content — like Cocomelon — that complements its original programming, according to a person at Netflix familiar with the matter.

YouTube isn’t a direct competitor to Netflix as a subscription service on demand per se, but it is arguably the most serious competition Netflix has within the family entertainment realm. Reed Hastings, one of Netflix’s co-CEOs, told analysts last year during an earnings call that YouTube is one of Netflix’s biggest competitors for people’s attention in general.

Being on Netflix also helps alleviate one of the biggest issues Moonbug encounters with YouTube: ongoing concerns over children’s safety. YouTube has faced multiple reports over the last few years about disturbing children’s content and predatory behavior on its platform, forcing the company to roll out new policies and product updates to try to counter the behavior. Still, it hasn’t helped YouTube’s general image with parents, many of whom see YouTube as a site they don’t want their children — especially young children — to use. Moonbug is in “regular conversations with YouTube about their efforts to make it even more suitable for kids,” Yeatman said, but Moonbug doesn’t control YouTube.

“We do see that there are some families where YouTube is the go-to platform in their household,” Yeatman said. “And there’s some families that maybe don’t like their kids watching YouTube, and Netflix is their go to platform.”

Other popular YouTube creators have found success partnering with more traditional networks and streamers. Nickelodeon partnered with Ryan’s Toy Reviews for a show, and HBO Max worked with Lauren Kobayashi Riihimaki, otherwise known as LaurDIY. It’s a trend that’s likely to continue, Amdocs vice president of media, network, and technology, and industry analyst, Anthony Goonetilleke said.

Streaming services need a plethora of content. And especially while production is shut down and harder to make, partnering with YouTubers or licensing their shows helps build these services’ catalogs. Plus, since YouTubers and popular YouTube channels already have built-in audiences, the goal is those fans will carry over to other streaming platforms.

“A big part of getting the most eyeballs is looking to the platforms holding the most attention,” Goonetilleke said. “A big part of that equation is YouTube.”

Moonbug is in a promising position right now. Production on many projects has slowed down or stalled completely, but Moonbug owns a number of properties — including Cocomelon — that can create new shows within their own smaller studios that are used to working on a faster timeline. Alongside Cocomelon on YouTube, Moonbug also brought its popular YouTube children’s show, Blippi, to Hulu. The goal is for Moonbug to be everywhere kids are and then eventually develop even bigger projects.

“We’re getting a lot of calls and having a lot of conversations about extensions, it’s very exciting, but we’re not rushing into anything yet.”

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