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Netflix Acquires StoryBots, Makes Push Into Children's Programming

Danny Vena, The Motley Fool

Streaming-giant Netflix (NASDAQ: NFLX) doesn't make acquisitions very often. When it does, it's usually pretty easy to see the value it brings to the company. After making only one acquisition of a content company over the past two decades, Netflix has just made another. The company revealed Thursday that it had acquired StoryBots, a children's educational media brand, for an undisclosed sum.

"Ask the StoryBots has a proven track record of synthesizing complex subjects into bite-sized lessons that are funny and entertaining for young kids and satisfying for parents," said Melissa Cobb, Netflix VP of original animation, in a statement announcing the deal. "We are thrilled to welcome Gregg and Evan into the Netflix family and look forward to building out the wonderful and whimsical StoryBots world, finding new ways to delight our growing member base of families around the world."

The Ask the StoryBots landing page on Netflix showing the five bots waving.

Image source: Netflix.

You may not know them, but your kids probably do

You may not be familiar with StoryBots, unless you have kids and are a Netflix subscriber. The company's program -- Ask the StoryBots -- follows the adventures of five curious animated robots who track down the answers to a variety of questions that are of interest to children, like why the sky is blue, how night happens, or why we need to brush our teeth.

Season three of the popular show is set to debut on Netflix later this year. Previous episodes have featured high-profile celebrity guests such as actors Edward Norton, Whoopi Goldberg, and Wanda Sykes, as well as rapper Snoop Dogg and comedian Ali Wong.

The characters are the brainchild of Gregg and Evan Spiridellis, the creative minds behind the popular digital entertainment studio JibJab. The brothers first rose to prominence during the 2004 U.S. presidential campaign when their mock video of candidates George W. Bush and John Kerry singing "This Land is Your Land" went viral.

Ask the Storybots is available in 22 languages and can be seen in 190 countries and has been called "the best kids' show on Netflix," so it isn't too hard to understand why the company is adding the production to its library of intellectual property. The program is based on an award-winning educational app that's used in more than 80,000 classrooms and was the recipient of the Teacher's Choice Awards for 2017 and 2018, as well as the Tech Edvocate Award. 

The next Sesame Street?

StoryBots CEO Gregg Spiridellis talked about the acquisition in an interview with CNBC:

Netflix really wants to create an educational franchise that's global. That's what they see StoryBots as. We want to make StoryBots the next generation of Sesame Street

The co-founders will take up positions in Netflix's animation department, working exclusively on expanding the StoryBots franchise, at least for the foreseeable future.

This has happened before

This isn't the first time Netflix has purchased a content company to beef up its intellectual-property library. The streaming giant acquired independent comic book house Millarworld in mid-2017 to secure the talents of its founder Mark Millar. While Millar's name may not be familiar, his work on groundbreaking storylines such as Captain America: Civil War, The Avengers, and Logan have certainly put his talents front and center. His creations also include Kick-Ass, Wanted, and Kingsman: The Secret Service.

Millar has been adapting a number of his other creations into movies and television series on Netflix, as well as working to create new characters and storylines for the streaming platform.

A strategic move

In recent years, Netflix has been increasingly interested in children's programming, no doubt in anticipation of Disney's (NYSE: DIS) upcoming streaming service, Disney+, which is set to debut in November. Netflix has been working to boost its lineup, adding programs like a reboot of Voltron, Guillermo Del Toro's TrollHunters, and Lemony Snicket's A Series of Unfortunate Events. The company even added a show called Beat Bugs, which marries children's stories with songs by the Beatles and includes such musical guest stars as Eddie Vedder (from the band Pearl Jam), Pink, Sia, and the Lumineers, just to name a few.

The streaming giant isn't in the habit of making acquisitions unless they result directly in additional content, and this one is no different. With Disney+ looming on the horizon and the vast library of movies and television shows that cater to a younger audience available to it, Netflix wants to be sure it has all its bases covered in time for the Disney+ debut.

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Danny Vena owns shares of Netflix and Walt Disney and has the following options: long January 2021 $85 calls on Walt Disney. The Motley Fool owns shares of and recommends Netflix and Walt Disney. The Motley Fool has a disclosure policy.