On-demand streaming services like HBO Now have given TV-lovers the freedom to watch whatever and whenever they want. But in the case of Sesame Street, they're also one of the biggest potential threats to its survival — which helps explain why the show's maker, Sesame Workshop, is embracing HBO now.
A big chunk of Sesame Street's revenues — 30 percent, to be exact — comes from the royalties it gets when it airs a show on TV channels like PBS.
But the last year has also seen an explosion in the number of online streaming apps available on the market, not only making it easier for consumers to find alternative programming for themselves and their children, but also, according to the New York Times, discouraging viewers from watching Sesame Street on traditional TV.
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.
Sesame Workshop last year launched its own streaming video app, called Sesame GO, which charges subscribers $3.99 a month or $29.99 a year. But it's unclear how many subscribers that service has. In a statement, Sesame CEO Jeffrey Dunn called the company's deal with HBO a "winning public-private partnership" that will allow the programmer to churn out twice as much content as before.
"We’re getting revenues we otherwise would not have gotten," Dunn told the Times.
Sesame Street's move to HBO may give it a longer financial runway. But one group that could suffer will be poorer Americans who've always watched Sesame Street on free, over-the-air television. Although broadcast TV will presumably continue to air old episodes, viewers will have to wait nine months to see the fresh content if they can't afford pricey premium cable packages or a high-speed Internet connection.
The result is that Sesame Street — which has long been an educational staple for all Americans, rich or poor — may soon become more of a luxury good than it used to be.