#Moonbug Helped Create a Kids Streaming Hit in ‘Cocomelon.’ Then Netflix and Disney+ Started Calling

Moonbug Entertainment is thinking about what platforms to conquer next.

The Candle Media-owned production company has long leaned on a strategy of ubiquity, making its programs like Cocomelon, Blippi and Little Baby Bum available on YouTube, and syndicating them on premium streaming platforms like Netflix and Prime Video.

But René Rechtman, Moonbug’s founder and CEO, thinks that there is a lot more room to grow.

Next year, Moonbug will launch its first series on Disney+ (My Magic Pet Morphle), giving it a presence on all of the largest paid streaming services. And last week Moonbug launched a Little Baby Bum spinoff called Little Baby Bum: Music Time that is a Netflix exclusive.

It’s part of a strategy that Rechtman says occurred to him while he was working at Disney.

“I just saw that vacuum, and at the same time, we know what the streaming services are struggling with,” Rechtman says in an interview with The Hollywood Reporter. “Not only to get subscribers, but also churn and to get these subscribers to stay on board. If you have strong, engaging kids brands, families tend to accept that monthly payment to the streaming services because families get entertained.”

Its new premium SVOD exclusives underscore that pivot, with the free and accessible and ubiquitous YouTube channels serving as a lab of sorts.

“When we find an audience engaging with a piece of IP, we then start analyzing and finding out what is it about this IP? Why are kids so so so keen on watching it?” Rechtman says, adding that the Moonbug team examines the content and tries to determine if the brand can be expanded. “If we think we can build a brand, we have gone a far, far way to where we want to go, and if we can build a franchise like Cocomelon, of course it’s a home run.”

Moonbug then sells those shows (and develops spinoffs) for premium streaming players, with Rechtman describing the “high yield” and “efficiency” of them, owing to their relatively low cost and high rewatchability.

Little Baby Bum and Morphle are two of its next big bets.

Both began life as independent YouTube channels, passion projects by their respective creators. Both were acquired by Moonbug in 2018, with the production company raising the production quality of the animation, and developing strategies to expand their respective brands.

“Really for us creatively, it’s the opportunity to take what’s essentially a music brand and their music videos and really create a greater affinity with those characters in that world that previously an audience would not register really on it with three minute YouTube content,” says Richard Hickey, Moonbug’s chief creative officer, of Little Baby Bum: Music Time. The new Netflix series builds on the YouTube show, building out characters and using the music to explore more educational lessons.

“The idea was to expand our world, get our audience more acquainted through narrative and dialogue around a show a seven minute show,” Hickey says. “And then we could overlay in there some more life skills, a music curriculum, and really up the quality of the animation and the music as we allow ourselves more time at a bigger budget, to really up the quality.”

“There’s there’s this tendency with preschool and nursery rhymes to really play it down,” adds Kathy Power, the senior creative executive for the shows. “Kids are at home listening to the music their parents are listening to, and they’re modern kids. And so, what I think [they] did so beautifully on this show is to marry nursery rhymes with the sounds kids are hearing at home as well.”

Morphle is another example. Originally a 2D YouTube animated series, Moonbug made it into a 3D CGI-animated series, with the different magic pets in the franchise serving as a ripe expansion point.

“The franchise potential of Morphle is extremely exciting because you’ve got this world — imagine you’re you’re a little kid, Mila in this case, and you’ve got a pet and it’s a magic pet — I can’t think of any greater kind of wish fulfillment for a little kid,” Hickey says, saying the IP potential is “not too dissimilar to Harry Potter for preschoolers.”

“In the three minute YouTube series, you can learn there’s only so much you can do and you’re really using these pets as kind of a quick tool to be able to achieve the purpose and move the adventure on,” Power adds, noting that in the expanded series for Disney “we’ve had this lovely opportunity to build out their personalities so kids really can build a relationship with them.”

From a business standpoint, Disney+ is also one more premium streaming platform that Moonbug is in business with, with the company already distributing shows through Netflix, Prime Video and Apple TV+, among others. Rechtman, a former Disney executive, and Candle Media co-founders Tom Staggs and Kevin Mayer, all played a role.

“As you can imagine with my background and of course Kevin and Tom behind the scenes, we have been in dialogue with Disney+ for a very long time,” Rechtman says. “It is the second biggest platform out there, and for us, it’s very important to work on premium platforms. It’s a very important part of creating higher quality shows and creating affinity with the audience.”

“One thing is the awareness that YouTube and similar platforms can create, but we also need affinity,” he adds. “What platforms like Netflix and Disney+ and HBO all great brands can create is that affinity so that’s really, really important.”

But expanding to new streaming platforms is only one piece of the puzzle. Another is new formats. Moonbug is already exploring the world of music albums and kid-friendly podcasts, and Rechtman says they are beginning to think of another format of critical importance: Video games.

“We’ve been very reluctant to step fully into gaming because we are dealing with preschoolers and it’s only their first step into gaming,” Rechtman says. “So when we do gaming it needs to be very focused on higher values and learning, and we have to figure out how we do that. But we also know that a lot of our core audience have aged out of the video format of our content, so maybe that’s the audience that we will serve with games.”

For Moonbug, and Candle Media, it’s also a bet on the future of children’s entertainment. It’s a lucrative market, but one that is notoriously hard to succeed in. Moonbug already has one juggernaut in Cocomelon (the only show on to consistently make Netflix’s top 10 list, month after month).

“It’s been a neglected category for many, many years. Its not a place where you win Oscars,” Rechtman says. “If you do content for kids, it’s not very glamorous. It’s almost like school meets entertainment. So you really need to have a passion for, and feel a responsibility towards your audience that you might not need to when you create adult content, which is very often about the creators and their vision.”