Sesame Street's move to cable will put new episodes of the educational kids' show on HBO, HBO GO and HBO Now. But as part of the move, Sesame Workshop says it will retire its own subscription-based Internet streaming service, Sesame Go.
The year-old Netflix-style app, which charges viewers $3.99 a month or $29.99 a year to view Sesame Street content, will be wound down at a later date to be determined, said Sesame Workshop chief operating officer Steve Youngwood, in an interview.
"We are going to be phasing it out as a standalone subscription service," said Youngwood.
Executives don't intend on killing the app entirely. In its wake will be a slimmed-down version that may provide access to more limited content for free, for example, or act as a portal for children to get to Sesame Street's main Web site. The company is still weighing what to do with the app, which Youngwood described as "core way" that children now consume content.
"Two-thirds of children who first discover Sesame do so through some on-demand platform," said Youngwood, "whether that's YouTube or cable systems, or streaming video on demand, or a game."
Amid the transition, existing Sesame Go subscribers will keep being able to watch full episodes on their PCs, tablets and other mobile devices. But "eventually" the company will stop taking new subscribers, it said. Youngwood declined to say how many customers pay for Sesame Go.
The decision to phase out Sesame Go just a year after its launch highlights a dilemma for Sesame Workshop that may sound familiar to consumers who've seen other online services come and go. How do you ease consumers off of a product they've grown to love, even if it no longer serves the overall business?
When a company like Google ends support for popular apps such as Google Reader, it often faces a major backlash from consumers. But, because Google's chief business remains search and not syndicated news feeds, it can weather the storm and move on.
Other businesses may not be so lucky. Remember Aereo? Aereo was a streaming video service that took free, over-the-air television signals and streamed them live over the Internet, enabling you to watch your local TV stations from anywhere. But a Supreme Court decision last year found that its business model violated federal copyright laws, forcing Aereo to file for bankruptcy protection and sell off its assets at a tremendous loss. When a feature is core to a company's overall success, it's a much bigger deal. Customers simply had to give up Aereo — and we haven't seen a product like it since.
For Sesame, the end of Sesame Go means consumers will have one less way to get full episodes without going through pay-TV providers. And as we pointed out Thursday, that puts the newest Sesame content further out of reach for those who can least afford to pay.