Moonbug Entertainment Ltd. is creating a YouTube-generated kids media empire.
Two of the most famous kids brands on YouTube have been purchased by the London-based company: Cocomelon, an animated show that is the most-viewed channel on the web platform, and Blippi, a program hosted by entertainer Stevin John The terms of the transactions were not revealed to Moonbug. According to Rene Rechtman, co-founder and Chief Executive Officer of Moonbug, the acquisitions were financed by raising $120 million from a consortium of investors including Goldman Sachs Group Inc., Felix Capital Partners LLP., Fertitta Capital Inc., and Raine Group LLC. Moonbug aims to use some of the capital to buy more.
Moonbug will now run the largest network of children’s channels on YouTube, which comprises 235 million users and produces over 7 billion views per month. In addition to Cocomelon and Blippi, Little Baby Bum is owned by Moonbug, which produces videos set to nursery rhymes.
Cocomelon, Little Baby Bum, and Blippi are household names for children around the world but are not trillion-dollar franchises like “SpongeBob SquarePants” or “Dora the Explorer.” Moonbug seeks to expand brands by translating songs, videos, and characters from YouTube channels into toys, Television shows, and albums.
“I have this vision of making the biggest enterprise in the children’s space,” Rechtman said in an interview.
In 2018, Rechtman, along with Alfred Chubb and John Robson, created Moonbug, motivated by the assumption that YouTube, part of Google’s Alphabet Inc., had replaced TV networks like Nickelodeon and Disney Channel as the destination of choice for millions of children. According to a new survey by the Pew Research Center, about 80 percent of parents say their children watch YouTube. Half of the most-watched YouTube channels are for youngsters in any given month.
Owners of big YouTube channels have started to explore other market opportunities with their wide audiences on the video platform. Toy companies have noted YouTube channels’ potential to boost sales, and a variety of streaming platforms, including Netflix, Hulu, and Amazon, have started to purchase the rights to shows based on popular children’s YouTube channels.
Rechtman said that he wants to create more characters for Blippi and increase its distribution from 12 episodes a year in English and Spanish to weekly videos in several additional languages.
Moonbug aims to translate Cocomelon ‘s programming — which produces about 3.5 billion views a month on YouTube — into several other languages, to license it to additional video platforms, and to produce merchandise based on its characters. “Cocomelon has the potential to become the world’s largest property when it comes to girls,” he said. “This is now, in terms of ratings.”