Cocomelon's Decline, Google Veo's Rise, Disney's & Candle Media Crossroads
Why Veo 3 is reshaping the economics of IP-dependent businesses in real-time
I quoted a mistaken data point about Cocomelon's move from Netflix to Disney+ last week. Variety stated that viewership of the 3D-animated children’s nursery rhyme program has “declined almost 60% from 2023 H1 to 2024 H2”. However, Variety mistakenly used two different metrics—Hours Viewed (H1 2023) and Total Views (H2 2023).
According to Netflix data, Cocomelon viewership declined 44% in Hours Viewed (601.2M to 335.3M) and 37.5% in Total Views—Netflix's runtime-adjusted metric introduced in H2 2023—between H1 2023 and H2 2024. The trends are similar but there is a key distinction in the data points: Assuming Netflix’s engagement data offers a lens into the “half-life” or rate of decay of popular IP in the age of streaming and generative artificial intelligence (GAI)—“Cocomelon” has not yet reached its “half-life” with paying Netflix subscribers.
Cocomelon’s data points reflect competition with other streaming services, gaming, YouTube, cable and broadcast. The bigger question is whether the rate of decay will increase in the face of emerging disruption from GAI platforms.
Google’s recent Veo 3 release—an AI video generation model that produces realistic and high-quality videos from text prompts, including synchronized audio and dialogue—and two conversations I had over the last few months suggest the answer is “yes”.
Key takeaway: If Google's Veo 3 continues to rapidly evolve towards producing Cocomelon-quality content in minutes rather than months, the entire economics of every IP-dependent business will shift overnight.
The Rapidly Changing Value of IP and Brands
“Half-life” seems cynical for a Netflix (and YouTube) juggernaut like Cocomelon. However, the cynicism is based on Netflix’s data and also on two perspectives on AI’s likely impact on IP and the consumer packaged goods (CPG) marketplaces.