'Sesame Street' moving to a more tech-savvy neighborhood: HBO

Aug. 14, 2015 3 AM PT

Tyrion Lannister, meet Big Bird.

HBO, the premium cable network behind decidedly not-kid-friendly shows such as “Game of Thrones,” “True Detective” and “Girls,” will soon be the first-run TV home of “Sesame Street.”

Time Warner Inc.-owned HBO on Thursday announced a deal with the nonprofit Sesame Workshop to make the next five seasons of the long-running educational program available on its cable channels and streaming services, as competition for young viewers grows.

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The deal is a marriage of necessity for the nonprofit organization that produces the 45-year-old program, long considered the gold standard in children’s educational television. It’s expected to help Sesame Workshop adapt to emerging technologies that have upended the television business in recent years.

Kids used to sit in front of living room television sets every morning to catch Oscar the Grouch and Cookie Monster. Now they’re using their parents’ smartphones and tablets.

Sesame Workshop Chief Executive Jeffrey Dunn said the shifts in viewing habits were immediately apparent when he started the job last fall. He said two-thirds of children first view the show on-demand, which meant there was less revenue coming in to make new content.

“It was pretty obvious we had a situation that was a result of that changing behavior,” Dunn said.

“Sesame Street” episodes will premiere on HBO this fall, and then air on PBS nine months later.

Financial details were not disclosed, but the new funding from HBO will enable Sesame Workshop to greatly increase its programming output. “Sesame Street” will go from 18 new episodes a year to 35, and the nonprofit will produce a new spinoff series for HBO. An additional educational series will also be developed, the companies said.

“This has been bubbling for some time,” said Michael Davis, author of the 2008 book “Street Gang: The Complete History of Sesame Street.” “Sesame Workshop has had flirtations with cable before. This is a smart deal that allows them to expand and create more programming.”

Sesame Workshop has come under financial pressure in recent years from declining DVD sales, which provided a much higher profit margin than the streaming video deals that have largely replaced the home video market.

For years, Sesame Workshop has depended on home video and streaming revenue along with licensing the characters of “Sesame Street” and its other programs for toys and other merchandise to fund its operations. Financing from PBS member stations covered about 10% of its production costs for “Sesame Street.”

PBS couldn’t make up for the shortfall, so Sesame Workshop had to look for a new partner to help fund the show. But it needed a pact that would keep the show on PBS, where it is available for free.

HBO Chief Executive and Chairman Richard Plepler said there was no hesitation on the part of his company to make such an agreement.

“We’re always looking for original programming that stands for excellence,” Plepler said. “It didn’t require much contemplation when the opportunity came to us.”

Under the new deal, PBS member stations will no longer have to pay to air the program. HBO has also secured the rights to 150 episodes from the “Sesame Street” library that will be pulled from rival streaming services and made available on its linear and on-demand channels. Those episodes will remain available on PBS’ children’s app and air as reruns on member stations.

HBO’s digital rivals — including Netflix, Amazon and Hulu — have been investing heavily in children’s programming to go after the crucial market of very young viewers who the company hopes will grow up to be paying subscribers themselves. Parents also have embraced technology: They feel better about parking their kids in front of a tablet because they don’t have to worry about all of the commercials.

Netflix this year has added nostalgic educational shows such as “Bill Nye the Science Guy” and “Reading Rainbow.” The Los Gatos, Calif., streamer teamed up with DreamWorks Animation in 2013 to make original children’s shows. Amazon, looking to beef up its own crop of children’s programming, ordered six new kid-skewing pilots in May.

Hulu last year expanded its distribution deal with Nickelodeon owner Viacom Inc., adding shows including “The Ren & Stimpy Show” and “Hey Arnold!”

While the HBO deal is a lifeline to Sesame Workshop, it was met with criticism from the Parents Television Council, a conservative media watchdog group.

PTC President Tim Winter said in a statement he found it “troubling” that families will have to subscribe to HBO and its adult-oriented content to access new episodes of the most beloved and acclaimed educational children’s show.

“Many families have eschewed premium cable networks — like HBO, Showtime and Cinemax — because of the explicit content,” Winter said. “But now they must subscribe to the very content they abhor in order to get original airings of ‘Sesame Street’ for their children.”

Davis believes the PTC’s argument is specious because of the evergreen nature of children’s programming.

“It’s fine for the PBS stations to wait nine months,” he said. “We’re talking about viewers who are 3-year-olds. They watch these episodes over and over again. They don’t know a new show from a rerun.”

Dunn also said the PTC’s objections were off-base, and that the deal would actually bring more children’s programming to PBS, and faster.

“It’s a great thing for kids,” Dunn said. “It just acknowledges that the world has changed and we need to change with it.”

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