Disney's New Competitor. NewsWire

NewsWire: 11/17/21

• Moonbug Entertainment, which owns some of the top children’s channels on YouTube, has been acquired for $3 billion. This is just the latest in a series of recent acquisitions in digital-first kids’ entertainment, which is proving to be big business. (Wired)
• NH: Moonbug Entertainment is quickly becoming one of the biggest names in children’s programming. A team backed by Blackstone Group recently purchased the company for a rumored $3B. 
• What makes it so valuable? Moonbug owns three of the largest YouTube channels for kids: Blippi, Cocomelon, and Little Baby Bum. In October, videos from these channels were viewed a whopping 2.37B times. The company makes money through advertisements, toys, and licensed characters. Moonbug is on pace to make over $100M in profits this year, and those profits are expected to double by 2022. 
• The company is taking advantage of parents' growing trust in YouTube. A few years ago, the site was seen as inappropriate for kids. Videos aimed at kids were frequently laced with violence and profanity. But YouTube has since changed its algorithms to sort out explicit material. More importantly, Moonbug has successfully established itself as a reliable brand for delivering absolutely wholesome and inoffensive programming. Here busy parents know that they can leave their kids for hours doing nothing edgier than exploring words that start with "A" or singing "Wheels on the Bus." 
• IMO, Moonbug could become a major competitor to Disney (DIS). All of its YouTube channels are easy to access, infinitely replayable, and ad-supported and therefore free. As Disney wades deeper into more sophisticated, and higher-cost content, it may find new competitors on YouTube vying for the one deliverable that was once a Disney monopoly: parental peace of mind.