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Can GoNoodle Climb to the Kid-Media Big Leagues?

If you’re a parent of grade-school kids in America, the odds are good your tykes know about GoNoodle’s upbeat music and exercise videos, designed to get them up on their feet and moving around. But GoNoodle doesn’t have the same brand recognition as, say, Disney or Nickelodeon — and KC Estenson wants to change that.

Estenson, former head of CNN Digital and digital media exec in Disney’s cable networks group, joined GoNoodle as CEO two years ago. His mandate: to turn the 7-year-old Nashville, Tenn.-based company that became a sleepy viral hit in classrooms across the U.S. into a major media brand.

When he was approached by a head-hunting firm for the job, Estenson says, “the pitch was, ‘This thing is the biggest kids’ media outlet you’ve never heard of.’”

Estenson is now armed with a fresh tranche of funding and has recruited former Disney, Warner Bros. and Quibi execs to the GoNoodle team. He envisions broadening GoNoodle’s programming into formats beyond music, dance and movement, lining up new distribution deals and potentially launching such lines of business as consumer products, partner-branded merchandise, live tours and a direct-to-consumer streaming service.

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GoNoodle, Estenson believes, can build on its legacy as a kid-safe digital destination — as TV viewing of kids’ cable networks continues to shrink and parents still have concerns about inappropriate content on YouTube. “It’s ‘Sesame Street’ meets Disney for the next generation,” he says.

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To grow the 50-employee company, Estenson led GoNoodle’s $8.5 million in new debt financing, which closed in January, from CHST Investment Holdings (the investment arm of the Children’s Health Care Network in Texas) and Chrysalis Ventures. The infusion brings the total funding to $20.7 million to date.

He has also tapped several entertainment vets to help steer GoNoodle’s next phase. The company is opening an L.A. office, led by chief content and creative officer Jan Fleming, a producer who has worked at Disney, Nickelodeon and Children’s Television Workshop. Another hire is Jason James, formerly with Disney/ABC, Warner Bros. and DC Comics — and most recently the Recording Academy’s first chief digital officer — who serves as head of content strategy, development and programming.

In addition, Estenson enlisted two new members of GoNoodle’s board: Diane Nelson, ex-president of DC Entertainment and Quibi’s former head of content operations, and Scott Dickey, CEO of audiobook publisher Podium.

Nelson, who left Jeffrey Katzenberg-founded Quibi last November to spend more time with her ailing mother, says she’s working to identify producers and creators for GoNoodle. “With the amount of content in the world right now, the opportunity is to break out of that clutter with great stuff for all stakeholders — parents, their kids and brands who want to be part of something that feels good,” she says.

Of course, many kids media companies espouse child-positive and educational approaches. But GoNoodle, launched in 2013, started life with a mission to promote physical activity and active learning, targeted initially at schoolteachers. Co-founder and ex-CEO Scott McQuigg had previously run HealthLeaders, a media and research firm for healthcare execs. Today, the company claims around 80% of U.S. public elementary schools use its videos (available for free, although there is a $10 monthly premium option for more content), with some 14 million kids every month interacting with the vids.

Estenson says he arrived at GoNoodle and realized, “This is bigger than the classroom.” In spring 2019 the company relaunched its app, which has had 3 million downloads since. GoNoodle has around 1 million monthly active users outside schools, he claims. The company’s YouTube channel has more than 700,000 subscribers, with nearly 400 million video views total.

The challenge for Estenson is to broaden the brand — without alienating the teachers and parents who brought it to the dance.

A chunk of GoNoodle’s revenue comes from promotional brand partnerships, which have included deals with DreamWorks Animation, the United States Tennis Assn., Nickelodeon, Universal Pictures, Cartoon Network and Warner Bros. GoNoodle’s most-watched video on YouTube, with more than 70 million views, is a sing-and-dance-along promotional tie-in for DWA’s “Trolls,” set to Justin Timberlake’s “Can’t Stop the Feeling!” This month, it launched a freeze-dance video for Disney’s “Frozen 2.”

“They have to be really careful with that kind of content,” says Christine Elgersma, a senior editor at Common Sense Media, a not-for-profit children’s media ratings organization, who also notes that the GoNoodle app is “in the upper echelon of our ratings and reviews.”

GoNoodle says it presents sponsored content in a separate Limited Time channel in its app. And Estenson argues that the company can maintain its position as a trusted kids’ brand while introducing revenue growth engines like merchandise and subscription VOD. “We want to be in lives of kids wherever they are,” he says, “but with positive, fun and healthy developmental activities.”

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