Vinoth Chandar has music in his blood.

Through the 1980s and 90s, his father Chandrabose had been a music composer in Tamil Nadu’s film industry. He had worked in over 250 movies, including those featuring superstar Rajinikanth. Yet, Chandar himself never showed much interest in the field.

However, things changed in 2011, when the software engineer became a dad—he fondly calls his daughter Harshita, Chu Chu. Over the next few years, Chandar would sing lullabies at night to put her to sleep. He took this practice forward and began creating animated videos of her dancing to popular nursery rhymes.

“She used to watch a lot of YouTube videos, and that made her very happy. That’s when I decided to draw her and fit her into various characters for her to watch,” the 38-year-old told Quartz. He began with the nursery rhyme “Chubby cheek” in early 2013. Within two weeks, the video had gone viral, attracting over 300,000 views.

Inspired by this success, and the wildly popular “Charlie bit my finger” video from 2007, Chandar identified an opportunity: Create content for toddlers and kids online. So, in February 2013, he established ChuChu TV, a company that creates animated videos of rhymes and original songs that are uploaded to seven channels on YouTube.

“There were a few channels back in 2013. But there was a lot of scope for improvement,” Chandar explained. “I made another video on ‘Twinkle twinkle little star,’ and we added over 5,000 subscribers with just the two videos. That gave me the confidence.”

Today, one of the network’s channels, ChuChu TV Nursery Rhymes and Kids Songs, is the second-most viewed channel on YouTube in India, after music channel T-Series. ChuChu TV itself has over 15 million subscribers, ranking third in the country after T-series and entertainment channel SET India, which have 35 million and 20 million subscribers, respectively. Since its launch, ChuChu TV has made around 384 videos, which have a combined viewership of over 11.8 billion. Globally, ChuChu TV Nursery Rhymes and Kids songs ranks 21st in the list of the most-watched channels.

One of its videos, “Johny Johny, yes papa,” has over 1.2 billion views, ranking among the world’s top-50 videos. This week, ChuChu TV was awarded the Diamond YouTube play button award, which is given to channels with over 10 million subscribers.

Most of the company’s viewers come from the US, India, the Philippines, Canada, and Vietnam. It also has a Spanish channel. Now, ChuChu TV plans to release videos in Brazilian, Portuguese, French, and Russian.

“The idea is simple,” Chandar said. “We want to be the Disney of the digital age.”

Diamond in the sky

Before he established ChuChu TV, Chandar, a computer sciences graduate from Madras University, had set up Buddies Infotech, a CD-writing and printing centre in Chennai, with four of his friends.

In the years following its launch in 2001, the company evolved into an IT services firm, focusing on designing games, apps, and animations. Such expertise came in handy when Chandar decided to get into videos.

He roped in his Buddies partners for ChuChu TV, with everyone pooling in funds. It has come a long way from then, with over 200 employees and a studio in Chennai.

Today, ChuChu TV is focused on creating lullabies, nursery rhymes, and songs for kids below the age of eight. ChuChu TV Nursery Rhymes & Kids Songs is meant for those under four and comprises videos of rhymes; ChuChu TV Surprise, for kids up to six years, is more educational. ChuChu Storytime features bedtime stories and ChuChu Funzone incorporates 3D animations.

“You have to credit the quality of the content that ChuChu TV has produced year after year,” said Aman Dayal, head of content partnerships at YouTube Family & Learning for India and southeast Asia. “Kids content is (a) highly competitive content category on YouTube globally, and ChuChu TV’s success is strongly linked to its ability to differentiate their content. They have their own unique style of storytelling, which includes upbeat music, very positive spin on lyrics, (and) quality animation, and new characters developed by them have allowed them to create their own unique identity on YouTube for age-old nursery rhymes.”

Since the beginning of the year, ChuChu TV’s average monthly views has been over 450 million, according to data intelligence firm Vidooly. Last month, Chandar said, the company added over 825,000 new subscribers.

All that means more money from advertisers. Currently, YouTube shares 55% of the revenue from a video with its creator, keeping the remaining 45%. “In India, for every 1,000 views, content creators would make in the range of Rs100 ($1.56) and Rs180 ($2.8). But when the content is (seen) in the US or Europe, they earn between $4 and $8. For ChuChu TV, their audience is spread across the world,” Subrat Kar, co-founder of Vidooly, said.

The company is now developing content for Spain, Mexico, Argentina, and the US, and also plans to roll out more programmes in regional Indian languages such as Tamil, Telugu, and Hindi. Vidooly reckons that ChuChu TV makes between $450,000 (Rs2.4 crore) and $720,000 (Rs4.5 crore) in earnings a month, while its annual earnings are believed to be between $5.4 million (Rs34 crore) and $8.6 million (Rs57 crore).

“If you see some of India’s biggest channels, be it All India Bakchod or The Viral Fever, they make between Rs15 lakh and Rs25 lakh every month from YouTube, apart from brand sponsorship. And they are among the most popular in India,” Kar said. “That’s when you realise how big ChuChuTV is.”

Going up the hill

Meanwhile, ChuChu is also battling intense competition.

Regional content providers such as InfoBells Telugu and Chellame Chellam are already making inroads into the untapped regional language market. YouTube estimates the Indian language user base to reach 500 million in the next few years.

“Kids is a highly competitive category and there are lots of popular channels in this space, such as Little Baby Bum, KidsTV, HooplaKidz, and others,” said YouTube’s Dayal. “The lifetime video views for each of these channels is in the billions—making it (a) highly engaged content genre.”

Dayal, however, sees a bright future for ChuChu TV. “One unique thing about kids and family content is that it doesn’t go out of style,” he said. “We absolutely believe that ChuChu TV has built a sustainable business and tapped into YouTube’s global reach and distribution for their content. And its great that they are now building on their strengths and focusing on developing of scripted storytelling formats targeting older kids. It’s a good strategy to continue to grow the offerings as their core audience grows up.”

Chandar, meanwhile, is quite clear about the next phase.

Apart from setting up a 20,000 square feet studio in Chennai, ChuChu TV is also steadily growing at over 30% in terms of revenue growth. “What we want is a strategic partnership, that can help us improve the company and the content and take it forward into its next phase,” he explained. “Right now, we don’t need money. We just want to stay grounded and not get ahead of ourselves.”