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HBO and Sesame Street announce five-year partnership, including nine-month exclusivity

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HBO and Sesame Workshop have announced an extensive, five-year partnership agreement giving the premium cable network first-run exclusivity on seasons of Sesame Street for the next five years.

Though the television network and non-profit organization have not released details on the money involved in the arrangement, it will allow Sesame Workshop to significantly expand the amount of content they produce in children's educational television.

Oscar the Grouch

"Our new partnership with HBO represents a true winning public-private partnership model," said Jeffrey D. Dunn, Sesame Workshop's CEO, in the press release. "It provides Sesame Workshop with the critical funding it needs to be able to continue production of Sesame Street and secure its nonprofit mission of helping kids grow smarter, stronger and kinder; it gives HBO exclusive pay cable and [streaming video on demand] access to the nation's most important and historic educational programming; and it allows Sesame Street to continue to air on PBS and reach all children, as it has for the past 45 years."

New episodes of Sesame Street, and the other new Sesame Workshop shows produced under the agreement, will become available to PBS and its member stations after a nine-month window in which they will be exclusive to HBO and HBO's streaming platforms.

Joan Ganz Cooney, co-founder of Sesame Street, stresses that such an agreement is a necessary part of ensuring that the work that Sesame Workshop does survives the changing media landscape. "Over the past decade, both the way in which children are consuming video and the economics of the children's television production business have changed dramatically. In order to fund our nonprofit mission with a sustainable business model, Sesame Workshop must recognize these changes and adapt to the times."

The New York Times' article on the partnership drilled down further into how the long-running staple of children's television has been forced to tighten its fuzzy belt over the last decade.

Sesame's partnership with HBO comes at a critical time for the children's television group. Historically, less than 10 percent of the funding for Sesame Street episodes came from PBS, with the rest financed through licensing revenue, such as DVD sales. Sesame's business has struggled in recent years because of the rapid rise of streaming and on-demand viewing and the sharp decline in licensing income. About two-thirds of children now watch Sesame Street on demand and do not tune in to PBS to watch the show.

PBS was not able to make up the difference, so Sesame was forced to cut back on the number of episodes it produced and the creation of other new material.

With this new financial backing, Sesame Workshop will produce a new Sesame Street Muppet spinoff series as well as an entirely new educational series for children. And the organization's flagship program Sesame Street won't miss out in the expansion. The agreement will allow Sesame Workshop to nearly double the amount of Sesame Street content it makes per year. That's "35 new Sesame Street episodes a year, up from the 18 it produces now," according to the New York Times.

(We were somewhat confused about these numbers, given that there were 27 episodes in the last season of Sesame Street. The HBO and Sesame Workshop representatives we reached out to clarified that only 18 episodes of new material were produced for the past season of Sesame Street, which, to be fair, is made up of many short, charming and reusable segments.)

On HBO's part, the network has licensed 150 library episodes of Sesame Street, approximately 50 past episodes of Pinky Dinky Doo (an animated series for preschoolers that focuses on early literacy) and episodes of the classic kids' entertainment program The Electric Company, rebooted by Sesame Workshop in 2009. And, as already stated, HBO will have exclusive, first-run subscription television distribution rights Sesame Street and the two new series produced under the partnership. Episodes of Sesame Street currently available through Netflix and Amazon streaming outlets will soon be removed.

The agreement puts HBO a leap ahead in the streaming provider race to offer the most appealing slate of easily accessible and streamable children's programming, a delectable audience for subscription streaming services. An adult might shrug when shifting licensing agreements cause reruns of their favorite show to become exclusive to a service they don't subscribe to. But the same person might easily be driven to shell out some extra cash for another subscription by the demands of a small child who doesn't understand why they can't watch Dora whenever they want to anymore.

Given Sesame Workshop's commitment to bringing early childhood educational programming to children around the world regardless of their family's finances, it does seem strange that the non-profit would enter an agreement that would give a for profit — one might even say "luxury brand" — service like HBO priority over PBS. But in practice, whether the viewer is watching an episode of Sesame Street on its premiere date or nine months later may not matter much, or even be understandable, to the show's target audience.