When it was announced last week that HBO was stepping in to partially take over Sesame Street in a five-year deal, it was both surprising and awesome, as it meant we’d be getting even more of our favorite preschool characters on top of other new projects. And while viewers and fans had a lot to celebrate, it was far more significant for Sesame Workshop, as the non-profit was in dire need of financial help, or else the world might have had to say goodbye to Sesame Street sooner than we’d ever expected.
Financial statements from Sesame Workshop show that times have been extremely tough, and that the organization operated at a loss of $11 million in 2014. The years previous to that have also been in the red for the non-profit, which would certainly make anyone around as grouchy as Oscar. But because this is the house that Big Bird built, they persevered and now the show has a potentially lucrative future that probably couldn’t have been predicted in the past few years. So we can now add Sesame Street’s continued legacy to the long line of treasures that HBO has provided the world, making for odd company with The Wire and The Sopranos.
Here’s the somewhat depressing way that Sesame Workshop CEO Jeff Dunn put it.
Without this five-year funding commitment from HBO, we would not have a sustainable funding model that would allow the continued production of the show.
According to THR, around ten percent of Sesame Street’s annual $40 million production cost is taken care of by PBS through licensing fees, but the Workshop has had problems getting the rest of that funding through the normal means. A huge chunk of their money used to come from DVD sales, but kids and parents have been shifting focus to streaming over purchasing physical products. As well, the show’s toy line (that includes things like Tickle Me Elmo) hasn’t been doing as well as it did in the past, as traditional toys are being supplanted by more interactive devices. At this point, their product licenses are bringing in just over what the production costs, and it’s estimated that the revenue in 2014 was right around $41 million.
But now we can all breathe a five-year sigh of relief, as the deal with HBO will not only keep this show on the air, but it will allow for even more content per year, as well as a new Muppets spinoff series. Sesame Street episodes will debut on HBO nine months before they air on PBS, which could definitely boost subscribers for its streaming service and subscription base. So while HBO might not have the large lineup of children’s programming that places like Netflix and Amazon do, they’ve got one of the most popular kid shows in history, and that’s definitely a sunny day for everyone.