“This is not a rejection of Sesame Street, and Sesame Street is not going away,” she said. “But we absolutely have a responsibility to change as the world around us is changing if we want to continue to deliver on our mission.”
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Sesame Street has been airing since 1969, making it one of the longest-running programs in television. The organisation behind it – originally named the Children’s Television Workshop – has hit financial headwinds before. Just a decade ago, DVD sales plummeted. They were a key source of revenue, and Sesame Workshop had to hunt for a lifeline.
That was when HBO, which had just debuted a stand-alone streaming service, paid the $30-$35 million licence fee to air new episodes as well as back-library episodes and specials, two people with knowledge of the deal said.
The windfall allowed Sesame Street to add episodes every season. PBS, which had aired Sesame Street from the start, would then air them many months after they appeared on HBO.
The arrangement kicked off controversy, but it paid off financially. Even as recently as 2022, Sesame Workshop generated $271 million in revenue and more than $20 million in profit, according to financial forms.
The end of the HBO deal, though, has coincided with a big shift in the streaming business. Wall Street soured on the chase for subscribers instead of profits, leading companies to cut way back on spending. The Peak TV era died, the number of new shows being made plummeted and an industry-wide contraction took hold.
When Max, HBO’s streaming service, announced plans to drop the Sesame deal last year, its executives said children’s programming was no longer “core to our strategy”. Instead, Max made a two-year, $US6-million-a-year deal to stream non-exclusive back-library episodes, according to internal documents.
In April, Sesame Workshop executives met with major streaming companies to begin negotiations for a new distribution deal. The executives anticipated reaching one within several months.
But the reality of the post-peak TV environment quickly became apparent, and the timeline was pushed back several times. Nearly a year later, Sesame Workshop remains in discussions with major streaming players such as Netflix, YouTube and Amazon Prime Video, according to the internal documents. It is also in discussions with other outlets such as Tubi, Roku and PBS.
Even before the search for a new distribution partner, Sesame Workshop had acknowledged that it needed to make changes for a rapidly changing – and deeply competitive – landscape.
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The 56th season of Sesame Street goes into production next month and will be revamped. The show will drop its traditional magazine-like format in favour of three segments – two 11-minute stories to open and close a show and a shorter animated feature in between. The show will also try to increase comedic elements, music and animation.
Sesame Workshop found that parents trust and respect Sesame Street but that children adore a show such as Bluey because it is more likely to provide bigger laughs and induce them to play after an episode ends, according to internal documents. Children also engaged with brands and shows such as PAW Patrol, Mickey Mouse Clubhouse, Peppa Pig, Baby Shark, Cocomelon and Blippi more than Sesame Street last year.
Then there’s YouTube, which is awash in children’s content, some of it high quality and much of it not.
Paediatricians and children’s media experts give Sesame Street high marks for its commitment to educating children with each episode.
“The environment around Sesame Workshop is changing so dramatically that what they are doing, and doing well, may not be as desirable as something that gives you a quicker hit of dopamine,” said Dr Michael Rich, director of the Digital Wellness Lab at Boston Children’s Hospital.
This article originally appeared in The New York Times.
