Sunny Days Are Coming To HBO: Behind The Big Move Of ‘Sesame Street’

CREDIT: RICHARD TERMINE
CREDIT: RICHARD TERMINE

Sesame Workshop and HBO announced a new partnership on Thursday to bring children’s classic Sesame Street to a premium cable network best known for shows you would never let your children watch. For the first time in its 45-year history, Sesame Street will air new episodes exclusively on HBO, which includes HBO Go, HBO NOW, and HBO on Demand. After nine months, those episodes will be available on PBS and its member stations for free.

Under the new partnership, Sesame Street can nearly double the number of episodes it produces a season, from 18 to 35. A Sesame Muppet spinoff is in the works, and Sesame Workshop plans to develop new original educational series for children. HBO will also stream 50 episodes of Sesame Workshop series Pinky Dinky Doo and The Electric Company, along with 150 archived episodes of Sesame.

Sesame COO Steve Youngwood told ThinkProgress by phone that the partnership was spurred on by two realizations: “The way kids consume media is changing, and the economics are changing.”

The former directly affects the latter. DVD sales make up a significant chunk of Sesame revenue. As children, like their parents, stopped watching DVDs and gravitated toward streaming media, sales plummeted. Sesame executives met with PBS brass, “and we realized we had to think of things differently.”

Sesame has been losing money of late, $21.7 million over the last three fiscal years, as donations, distribution fees, and licensing for merchandise have all dropped. As Sesame Workshop CEO Jeffrey Dunn told CNNMoney, “We were faced with no ability to make the show going forward.”

We’ve been operating at a loss the past several years, and this is about putting us on stable ground.

“We’ve been operating at a loss the past several years, and this is about putting us on stable ground,” Youngwood said. “This is about a sustainable business model, and expanding the amount of content which enable us to do our mission in an impactful way.”

Youngwood would not say if, without HBO, Sesame would have gone off the air. But “Without some new way of thinking of things, the long-term viability would have been challenging. I think there are probably other ways we could have figured it out, but this was the one that best aligned with serving our mission, creative growth and the financials.”

A spokesperson for HBO told ThinkProgress that “HBO is incredibly proud of the role we’re playing in securing the future of Sesame Street, and the availability of it being free to PBS is huge.” As for the nine-month delay, he said, “It’s important to know that all children will have access to these shows.”

The arrangement is a big victory for HBO: Plenty of kids content is available on other streaming platforms — which is to say, HBO’s rivals — and there is currently nothing for children on HBO. (Unless your very precocious preschoolers are hooked on Veep.) Parents looking at a monthly budget might decide to swipe an HBO Go password off that cool guy from work and cancel their personal subscription. Not the kind of attitude HBO wants potential subscribers to have, especially not as HBO Now, the network’s standalone streaming service, is still so new in the marketplace. This lures in a new, massive subscriber base to a platform that previously had nothing to offer the pre-K set.

But from Sesame Workshop’s point of view, the structure certainly sounds like a violation of Sesame’s founding, public-television ethos. All the wealthier kids get shiny, brand new episodes of Sesame Street, while underprivileged children get last year’s shows.

Dr. Michael Rich, director of the Center on Media and Child Health in Boston, told the New York Times that “he feared that Sesame Workshop will face either overt or implicit pressure to create new programming or spinoffs that are more commercial and less educational,” and that the partnership could significantly cut back on funding for PBS.

“I am worried about the future of PBS,” he said to the Times. “Not only is ‘Sesame Street’ currently a flagship property, but it may start a trend with other programming.”

Youngwood insists the nine-month delay of new episodes will not be an issue for children. Reruns will continue to air on PBS while the new shows are streaming on HBO. Episodes, and segments from previous episodes, are always woven into new Sesame content, he said.

“If you look at how kids consume TV… in an on-demand world, the order they watch it in is not that important,” he said. As for educational benefit, “No one is less or more well off based upon which specific episode that they are watching. It’s really the whole. And the most important thing is that they are going to be able to access it for free, and they’ll have more content than they’ve had in the past few years, and we’ll have more shows.”

Research does back up Youngwood’s claim. While adults, even the binge-watchers, place a high value on getting access to a show as soon as it airs — imagine being told you could not see the new episode of Game of Thrones until nine months after half the people in your office have already watched it — children have different consumption styles. As Brian Stelter reported in a 2013 New York Times story, “When children are enamored of a show (or, more specifically, a character) they want to watch the same episode over and over and learn every detail. Instead of binge viewing as their parents do, they déjà view.”

No one is less or more well off based upon which specific episode that they are watching. It’s really the whole.

Anecdotally, anyone who has spent time with a small child already knows this; no sooner can you finish reading a book to a five-year-old before you will hear them demand, “Again! Again!” As the Times reported, in 2013, shows for preschoolers were the most-re-watched by families that subscribed to Netflix; that same year, Amazon claimed that 65 percent of its most-replayed programs on Prime Instant Video were children’s shows.

Youngwood wouldn’t specify what other platforms Sesame considered besides HBO; he would only say that “in a world of trying to adapt to the changing consumption habits of on demand, you can assume we met and had conversations with all the other major players in that world.”

So Sesame could have landed at Netflix, which already has a wide variety of offerings for kids — its “Just for Kids” section launched in 2011, and now boasts classics and original content — not to mention massive deals with Walt Disney Co. In 2012, Disney agreed to sell its theatrical movies to Netflix, starting in 2016, a package valued at several hundred million dollars. The following year, Disney and Netflix signed a multi-year agreement for five new live action series based on Marvel characters.

Also likely in the mix was Amazon, which in June 2013 struck a multi-year deal with Viacom for Nickelodeon programming that included the exclusive rights to air the network’s preschool shows. (The arrangement, reportedly worth several hundred million dollars, was Amazon’s largest streaming deal to date.) Amazon has original children’s programming as well. Hulu, too, was a probable contender: It offers Hulu Kids, a commercial-free service for Hulu Plus members, and it is the only streaming on-demand service to offer current seasons of Nickelodeon shows. Earlier this year, Hulu landed streaming rights for several Disney Junior shows. PBS Kids series air on Hulu, too.

Youngwood wouldn’t get into the details of why HBO was the just-right home for Sesame, though the Muppets and HBO do have some history: HBO aired Jim Henson’s Fraggle Rock, from 1983 to 1987.

I asked Youngwood if HBO would ever make an exception to its exclusivity clause, should a disaster occur that Sesame would want to respond to in real time. Some of the most memorable episodes of Sesame Street have been those produced in the aftermath of tragedy, designed to help children cope with horror, like those aired after 9/11, Hurricane Katrina, and Hurricane Sandy. “I think you never say never,” said Youngwood. “If a certain situation came up, I think the right conversation could happen.”

In the meantime, Youngwood confirmed that HBO “will not have any influence over the show. Creative is driven completely by our staff here.”