Cocomelon, the hugely successful kids’ YouTube channel, is moving into new areas, including merchandising, albums and movies, which may be a response to the ad targeting rules that came into force last month.

With around 2.5 billion views every month of its nursery rhymes and songs – making it the second most watched YouTube channel anywhere – Cocomelon rakes in more than $11 million in monthly advertising revenue, according to Social Blade estimates.

Whatever the actual figure, it has taken a hit since YouTube was forced to stop selling targeted ads on videos young children are likely to watch; the platform also had to stop sending new video notifications, a move likely to have an adverse impact on a video’s popularity and revenue-earning potential.

Founder Jay Jeon declined to tell Bloomberg by how much revenue had fallen, but the fact that he is now opting to diversify beyond Cocomelon’s current way of working – typically uploading one short video a week – suggests it’s potentially significant.

The success of the channel is relatively recent. Back in 2006, Jeon and his wife were making the videos to entertain their own children; only later did it become a full-time job and it wasn’t until 2017, by which time the team surrounding Jeon were generating more than 100 million views a month, that things really took off.

That was when they started producing cartoons with 3D-rendered characters, almost doubling monthly views. In 2018, Jeon changed the name of his channel from ABCKidTV to Cocomelon and by the end of the year monthly views had leapt to almost 2 billion.

Detractors complain about the low educational value of the content and argue that Cocomelon’s success has more to do with canny SEO than anything else – a claim Jeon rejects.

“I never look up the reason why something is popular or how I can please the YouTube algorithm,” he said. “I know what matters. Stories matter.”

Sourced from Bloomberg, The Verge; additional content by WARC staff