For nearly five decades, “Sesame Street” has been a staple of the traditional broadcast television model, known as linear TV. (“Linear TV” describes any real-time, scheduled programming.) Even this bedrock of cable television is changing with the times, as the children’s program has now agreed to a deal with HBO to first air its episodes on the independent network. The financial details of the deal have not been disclosed.
“Sesame Street” has long been aired on the Public Broadcasting Service (PBS) for free, but has been in a bind for the much-needed funding that HBO will provide. New episodes of “Sesame Street” will still be shown on PBS, but only 9 months after they have already aired on HBO.
The Demise of Cable TV
Linear television programming has increasingly been losing viewership, losing out to pay-per-view and on-demand services such as Amazon, Netflix, and Hulu. The New York Times even pointed out, “the [Sesame-HBO] deal speaks to the digital transformation upending the television business, primarily the explosion of streaming video creating a generation of children who watch shows on demand, often on a mobile phone or tablet, instead of flipping on a TV.”
As various media entities adjust to new business models and evolving consumer preferences by switching from traditional forms of dissemination to more modern broadcast vehicles (such as video streaming services), changes that were once unthinkable are becoming more commonplace. The move for “Sesame Street” is just one such example of this trend.
The initial response to the move by Home Box Office Inc. to acquire a public station’s (and the nation’s) flagship children’s educational program was understandably mixed. Although some saw this as Sesame updating its content distribution strategy to match the times, other groups such as parents’ organizations and consumer advocates have complained that the HBO deal undermines the original intent of the show—the provide educational material for the children of disadvantaged families.
Undoubtedly, millions of American children living in low-income neighborhoods got their first introduction to reading and math through Big Bird and the gang, and millions more children whose parents immigrated to this country from around the world first learned English by watching the show. Its place in the history and culture of the U.S. is unquestioned. Critics argue that by offering “Sesame Street” first on a subscription-based network, which in some respects favors affluent children, the program is losing sight of its original mission.
The Economically Rational Decision
Despite the optics, the move to HBO (or some similar network) is a lifeline for Sesame Workshop, the nonprofit that produces “Sesame Street.” Since the show first began airing in the late 1960s, Sesame Workshop has typically received less than 10% of its funding from PBS, and is beginning to financially hemorrhage: the group lost $11 million last year.
With HBO stepping in, not only can “Sesame Street” continue to be produced—and is actually expanding from 18 new episodes per year to 35—but it can afford the talent to create the high-quality educational programming that families have become accustomed to from the iconic program. PBS is also on board with the deal, coming out in support of the arrangement despite the 9-month airing delay on cable TV. Jeffrey Dunn, CEO of Sesame Workshop, also points out that children still enjoy reruns of “Sesame Street,” as the timing of the episodes means little to the kids who consume them.
With the new partnership with HBO, “Sesame Street” will no longer be available on rival streaming services such as Amazon and Netflix, revealing how highly competitive it is among the new guard of the mass media.