YouTube is overhauling its kids content following years of controversy and a $170mn fine from the FTC. Yet, it remains a mystery as to who owns the largest kids channel (Cocomelon) on YouTube. Why?
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UPDATE: According to this Bloomberg article that came out the same week I published this, Cocomelon is owned by an Asian couple in California.
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In the 2010 movie Inception, Leonardo Dicaprio plays a corporate spy who is able to insert ideas into a person’s subconscious through a process called — drumroll — “inception”.
His character, Cobb, famously describes the power of an idea:
“Once an idea has taken hold of the brain it’s almost impossible to eradicate. An idea that is fully formed – fully understood – that sticks; right in there somewhere.”
As the father of a toddler, my brain has been incepted by something equally sticky and impossible to eradicate: Cocomelon YouTube videos.
GIF of a popular Cocomelon nursery rhyme video (Gyfcat)
For the uninitiated, Cocomelon is an animation studio that creates extremely catchy nursery rhyme videos targeted at children. And based on the fact that Cocomelon is the world’s third most-subscribed to YouTube channel (72.3mn subs) with more than 50 billion views across ~500 videos, I suspect millions of other parents (and children) have also been incepted.
Despite these staggering engagement numbers — and an estimated ad revenue that could exceed $100mn a year — no one knows for sure who owns Cocomelon.
This anonymity is particularly perplexing in light of Google’s recent $170mn settlement with the Federal Trade Commission (FTC) for violating a children’s privacy law.
How could the largest kid’s YouTube channel not have a clear beneficial owner?
This article is my attempt to find out.
Kids content helps to drive YouTube’s $15 billion business…
During its latest earnings release in early February, Google revealed revenue figures for YouTube for the first time. The video streaming business generated $15 billion in ad revenue on an annualized basis, accounting for ~10% of Google’s total revenue.
In many ways, YouTube’s revenue figure is much less impressive or consequential than other key statistics for platform:
- It is the world’s second largest search engine and second most visited site after Google.
- It is the 2nd most popular social media platform (after Facebook) with 1.9bn users.
- 400 hours of video are uploaded to the platform every minute.
- People watch over 1 billion hours of YouTube videos a day, more than Netflix and Facebook video combined.
While Google did not provide more granular details on its YouTube numbers, a 2018 survey by Pew Research suggests that kid’s content plays a significant role on the platform.
Pew found that 81% of parents let their children 11 years old or younger watch videos on YouTube. Further, in a content analysis of more than 340,000 YouTube video recommendations, kids content made up 22% of the top 50 most-recommended videos by type (behind only music videos, 28%).
Content analysis of the top 50 most recommended YouTube videos across 340,000 recommendations (Pew Research, 2018)
…but is not even meant to be on the platform
What’s notable about the kids content statistics on YouTube is that Google itself has stated that the video platform is not for children under the age of 13.
The search giant’s aforementioned $170mn settlement with the FTC was related to the company’s violation of the 1998 Children’s Online Privacy Protection Act (COPPA) law, which required parental consent for collection of data for children under 13.
For years, YouTube illegally collected children’s data and served them personalized ads. Ads often directed at young children without the cognitive faculties to understand what they were viewing.
The settlement also requires that, as of January 2020, YouTube creators have to identity content made for kids. Such “kids” content will no longer feature personalized ads, comments, live chat, notification bell, stories, save to playlist, autoplay on home, channel memberships and more.
Without personalized ads, Hank Green — the popular author and YouTube creator of educational content — estimates that revenue for kids content creators may drop by more than 50%.
He further explains that the settlement will “almost certainly means fewer Kids content creators, but hopefully the ones who will stop existing are the ones making the more vacuous stuff that only distracts.”
Compared to a show like Sesame Street — which staffs PhD experts in child development — kids content on YouTube is often created with little thought to a child’s cognitive needs and, rather, is intended to game the YouTube algorithm.
When Green highlights “vacuous stuff”, he is likely referring to the proliferation of low-production and repetitive content such as toy unboxings, egg surprises and ML-generated (often disturbing) cartoon videos with little educational value.
While YouTube’s new policy changes are a step in the right direction, it is yet to be seen if the quality of kid’s content will actually improve.
The Owner Of YouTube’s Biggest Kids Content Creator (Cocomelon) Is A Mystery
To be sure, the ultimate responsibility for policing a child’s media diet falls onto the parents.
However, just as it was unrealistic a generation ago to expect a child to never see a TV, the reality is that today’s children are surrounded by shared mobile devices.
These smartphones and tablets are one-click away from YouTube “kids” content that Professor David Carroll (Parsons School) believes would be “rated R, MA, parental discretion advised” by traditional self-regulatory ratings systems like the film industry.
In 2015, YouTube created a dedicated YouTube Kids app but according to Bloomberg, “its audience is tiny compared to the full site.”
The table below identifies kids-oriented content (in red) among the top 50 most-subscribed to channels on the main YouTube site.
It suggests that kids content is still very much a part of the offering.
And Cocomelon, with more than 72 million subscribers, is by far the largest player in the space.
Who owns Cocomelon?
An investigation by the Wall Street Journal in April 2019 was able to attribute that Irvine,CA-based Cocomelon was a subsidiary of Treasure Studio Inc., a detail that cursory web browsing will uncover.
The WSJ was unable to ascertain any other ownership information.
Per the Journal, anonymity on the Google video service is a feature not a bug: “YouTube doesn’t require content providers to identify themselves, and many don’t provide clues beyond the country where they are located. Even then, it isn’t clear whether the information is accurate.”
Using this report as a jumpoff, I set out to dig deeper into Cocomelon’s background.
Is Cocomelon Part Of An AT&T-owned Media Network?
I started my research into Cocomelon on Wikipedia.
Strangely, Cocomelon studio did not have a Wikipedia entry for basically the final four months of 2019.
This piqued my interest because earlier in that year, all eyes in digital media were focused on the race to 100 million subscribers between the only two channels that are now more popular than Cocomelon – T-Series and Pewdiepie.
The disconnect between Cocomelon’s seeming popularity and its light media coverage (including who is its owner) led me to uncover the following timeline:
- September 2006: Early iteration of Cocomelon (named That’s Me On TV) releases 2D children’s education videos (but posts sporadically over the next few years).
- January 2011: After 5+ years as a Google / YouTube partnership executive, George Strompolos founds Fullscreen Media, a social content and creative agency that works with YouTube stars.
- April 2013: Cocomelon’s Facebook page is created under the name abckidtv (“ABC Kids TV”), and the company begins to focus on nursery rhyme videos.
- September 2014: Otter Media (an AT&T and Chernin Group media venture) acquires Fullscreen Media which, at the time, worked with more than 50,000 content creators who engaged 450 million subscribers and generated 4 billion monthly views.
- June 15, 2018: After winning a Federal antitrust case, AT&T completes its acquisition of the media conglomerate Time Warner.
- August 7, 2018: AT&T acquires full ownership of Otter Media (including Fullscreen media) for $1 billion.
- August 17, 2018: The Cocomelon Facebook page announces a name change.
- August 17, 2018: Twitter spike of Cocomelon-related content.
- From 01-01-2006 to 08-16-2018, there are zero Tweets under the search term “Cocomelon youtube”; Twitter search results for “ABC Kids tv YouTube”, “Abckidstv YouTube” and “ABC KidsTV YouTube” go to dead links or unrelated content.
- On 08-17-2018, there are 100+ Tweets related to “Cocomelon youtube”, all of which take the format of either “I like [Cocomelon video]” or “I added [Cocomelon video] to my list” in various languages and all link to the Cocomelon YouTube library (most of these accounts have less than 100 followers).
- About the same number of “Cocomelon youtube” Tweets occur on the next day (08-18-2018) and has pretty much not stopped (albeit in a slightly different format and alongside more organic content)
- September 2nd, 2018: Cocomelon is added to the “most subscribed YouTube Channel” Wikipedia page for the first time, with Fullscreen Media as the corresponding media network.
When Cocomelon was added to Wikipedia, the channel had 18 million subscribers; since then, the subscriber count has quadrupled.
Neither Fullscreen Media, Otter Media or AT&T has made a public comment regarding Cocomelon.
Since its name change to Cocomelon, the YouTube channel has seen explosive subscriber growth (Social Blade)
So, Where Does That Leave Us?
AT&T’s acquisition of Otter Media two months after it won its antitrust case provides one plausible theory for why none of the involved parties have publicly stated a connection to Cocomelon.
According to a trial brief for the antitrust case concerning AT&T’s merger with Time Warner, one position that the telecom provider took was that of David vs. the digital tech Goliaths.
According to AT&T, firms like Google, Netflix, Amazon, and Facebook “are now dominating the industry,” and that AT&T and Time Warner “are merging, frankly, to try to keep up,”
It was in AT&T’s interest to downplay the portfolio of media assets the firm would have following a Time Warner merger. The sensitive nature of Cocomelon’s offering was probably also not a topic worth shining more light on.
Based on all of this information, we are left with the following questions:
- Does Fullscreen Media own Cocomelon?
- If not, is Fullscreen Media aware that the only Wikipedia entry for Cocomelon connects the two?
- If Fullscreen Media (or Otter Media, and consequently AT&T) does own Cocomelon, how come there has been zero press coverage or explicit acknowledgement?
- Is it a complete coincidence that Cocomelon changed its name and saw its social presence spike (with what look like Twitter bots) within 10 days of AT&T’s full ownership acquisition of Otter Media (and Fullscreen Media)?
- If none of the aforementioned firms own Cocomelon, who does? And why is this ownership such a mystery?
- Does YouTube know the beneficial owner of Cocomelon?
To be clear, none of this is to say Cocomelon itself is actually doing anything wrong.
The videos are unobjectionable and — other than the fact that I can’t eradicate the nursery rhymes from my head — the content seems fine.
I’m also not a child development expert and Cocomelon’s status as a leading kid’s content creator with little information on its background seems odd.
A generation ago, Mr. Rogers famously had to testify before the senate to secure funding for his educational TV show.
Today, no one knows who owns the most prolific creator of children’s content on the world’s largest video streaming platform.
From Google’s end, allowing anonymity for Cocomelon (or any other kids content creator) seems inconsistent with YouTube CEO Susan Wojcicki’s statement that “responsibility is our number one priority at YouTube, and nothing is more important than protecting [kids].”
Whether or not AT&T owns Cocomelon, there’s an uncontroversial point to be made: ensuring quality kid’s content and children’s privacy surely includes knowing who the platforms content creators are.