Why ‘Sesame Street’ Had to Turn a Corner

You might say “Sesame Street’s” newest move is being brought to you not by a letter or number, but by a symbol: $. If the show’s production company, Sesame Workshop, didn’t find a new way to win financial support for the venerable kids’ program, it would not have been able to continue in its mission of educating children the way it has since 1969.

“The current path we were walking on wasn’t going to work,” explained Steve Youngwood, chief operating officer of Sesame Workshop, in an interview Thursday afternoon. He said the new one will: a five-year deal with Time Warner’s HBO that will result in the production of nearly twice as many “Sesame Street” episodes per season than usual (albeit each half as long).

“Sesame Street” is a national treasure, created in the late 1960s as a way to use TV to help young kids prepare for school. Its characters — ranging from Big Bird to Elmo to Abby Cadabby — are touchstones for parents and kids and often some of the very first figures to which TV’s youngest viewers are exposed. Behind the treasure, however, was a failing economic model, Youngwood explained: The DVD revenues that had fueled the program in recent years have been drying up, a testament to the new ways kids access video.

“Yesterday’s DVD is today’s SVOD,” he said, a reference to subscription video-on-demand services like Netflix and Amazon that have grown in popularity among children.

Youngwood, a former executive at Viacom’s Nickelodeon, joined Sesame Workshop in April, but his boss was already on the hunt for a new way to support the program. Jeffrey Dunn came aboard as chief executive in the fall of 2014, Youngwood said, and had already realized that with PBS providing just about 10% of the program’s production budget, something had to give.

In recent months Sesame Workshop met with a number of players that Youngwood declined to name. “We talked to everybody, but the focus was on cross-platform on-demand providers,” he said. Sesame, which made the outreach with PBS’ knowledge, also had a condition that many regarded as a deal-breaker: “Sesame Street” had to remain available in some fashion to the public TV outlet.

“It was a concept many people couldn’t get around,” Youngwood said, “and that was a prerequisite to any conversations we were going to have.”

The pact with HBO ensures PBS has access to new episodes, but after they run on HBO for a nine-month window. And it will spur the creation of new content: a “spinoff” featuring one of the current “Sesame Street” Muppet crew — Youngwood declined to offer candidates under consideration — as well as a potential new series that would “allow us to educate in a different way.”

What if a new episode of “Sesame Street” contains a parody of something in the zeitgeist, or refers to a current event? In recent years the show has  spoofed HBO programs like “True Blood” and “Boardwalk Empire,” for example. Just as some of John Oliver’s routines from HBO’s “Last Week Tonight” make it on to YouTube after the show is broadcast, so too could some of “Sesame’s” timeliest routines, said Youngwood. “YouTube will still be a very important platform as we try to connect,” he said.

Whether it’s seen on HBO or PBS, “Sesame Street” will be 30 minutes long going forward, not an hour. Youngwood said the show will retain its “magazine” format, but is likely to have shorter segments and not as many as in the 60-minute version. The vignettes are likely to hew more closely to the theme of each episode. He predicted the opening “street story” segment featuring the cast would remain and hinted that Elmo would stay a feature of the show, along with many interstitials. He declined to elaborate on what might be removed or truncated as part of the new time allotment.

“Given the way kids have evolved, that was the most engaging format that fits both linear and on-demand viewing habits and allowed us to be all about engagement,” Youngwood said. “Without engagement, you don’t educate.”

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