Sesame Street takes time.
The Sesame Workshop, a nonprofit organization responsible for Elmo, Big Bird, Cookie Monster and the rest of the stars of “Sesame Street,” faces what executives call the “complete storm” of trouble.
The organization lost its favorable contract with HBO and paid between $30 and $35 million a year for the show's rights for 10 years. There's nothing wealthy about offshore as Hollywood suddenly sees all the pennies.
Then there's the Trump administration. The cuts to the US International Development Agency stripped off a valuable grant sesame workshop that nonprofits didn't expect to suddenly lose. The administration's attacks on public media could lead to several more cuts.
Additionally, “Sesame Street” risks getting lost in a fast-changing, fast-changing, kids-oriented TV landscape shuffle. The show is far behind shows like “Blue” and “Coco Melon” with Nielsen's streaming numbers. YouTube is attracting even more attention.
Together, these forces left the organization trying to understand how to navigate the next few years, a crisis that nonprofits say they will demand a “reset.”
The Sesame Workshop cut around 20% of its staff, or nearly 100, a few weeks ago. Without cost savings, the organization would face a deficit of nearly $40 million next year, according to an internal document reviewed by The New York Times. Despite the cuts, they had to withdraw $6 million from their investment fund for the first time in over a decade to cover some of the budget shortfalls.
The uncertainty surrounding “Sesame Street” is just the latest fallout from the significant changes that wiped out the television business in the streaming era. Other long-standing TV franchises and classic genres of broadcast and cable face similar challenges. With that concession that needs to be changed, Sesame Street will have a rethinked look from next year.
Shelley Westin, a 27-year veteran of Sesame Workshop, who became CEO last year, said that while the nonprofit is facing new economic realities, he “is confident that we can maintain this work.”
“This is not a rejection of 'Sesame Street' and 'Sesame Street' hasn't disappeared,” she said. “But if we want to continue our mission, we are absolutely responsible for changing as the world around us is changing.”
“Sesame Street,” which has been airing since 1969, is one of the longest-running programs on television. The organization behind it was originally called a children's television workshop, but it was previously hit by financial headwinds. Just 10 years ago, DVD sales plummeted. They were an important source of income, and the Sesame Workshop had to look for a lifeline.
That was when HBO, which just debuted its standalone streaming service, paid a license fee of between $30 million and $35 million to air new episodes and back library episodes and specials.
Windfall allowed Sesame Street to add episodes each season. PBS, which aired “Sesame Street” from the beginning, will air many months after its appearance on HBO.
The arrangement stopped the controversy, but it paid off financially. According to financial format, in 2022, the SESAME workshop generated revenues of $271 million and more than $20 million in profits.
However, the end of the HBO trading coincides with major changes in the streaming business. Wall Street has become sour with subscriber tracking instead of profit, leading businesses to recapture their spending. The peak television era died, the number of new shows plummeted, and the industry-wide contraction took hold.
When HBO's streaming service Max announced plans to halt Sesame trade last year, the executive said child programming is no longer “center of our strategy.” Instead, Max signed a $6 million annual contract to stream non-existent back library episodes, according to internal documents.
In April, executives from the Sesame Workshop met with major streaming companies and began negotiating a new distribution deal. Executives were hoping to reach one within a few months.
However, the reality of the post-peak television environment soon became clear, and the timeline was pushed back several times. Almost a year later, the Sesame Workshop continues to talk with major streaming players such as Netflix, YouTube and Amazon Prime Video, according to internal documents. It has also been discussed with other outlets such as Tubi, Roku, and PBS.
Even before searching for new distribution partners, the Sesame Workshop acknowledged that changes were needed for a rapidly changing and deeply competitive landscape.
The 56th season of Sesame Street will be produced and improved next month. The show favors three segments by dropping traditional magazine-like formats. Two 11 minute stories open and close the show, during which the short animation feature closes. The show also tries to increase the comedy elements, music and animation.
Sesame Workshop discovered that parents trust and respect “Sesame Street,” but found that children adore shows like “Bluey.” The kids are also involved in brands and shows such as Paw Patrol, Mickey Mouse Clubhouse, Peppa Pig, Baby Shark, Cocomelon, and Blippi.
Next is YouTube, which is full of child content. Some of it is of high quality (Ms. Rachel Channel is outstanding and has recently been licensed to a good return from Netflix).
Pediatricians and children's media experts have given the “Sesame Street” mark for their commitment to educating children in each episode.
“We've seen a lot of fun and healthy food,” said Dr. Michael Rich, director of the Digital Wellness Lab at Boston Children's Hospital.
Despite the challenges facing the organization, the timing of job cuts remained remarkable for staff. Much of the Sesame Workshop's administrative workforce includes education experts, fundraisers and paralegals – had been preparing to declare unions for several months. On March 4, the employee announced they were forming a union, and stolen it at a rally outside the nonprofit Midtown Manhattan office. Shortly after the rally, workers gathered for a staff meeting where they learned about cuts.
“We really went from the highest high of the day to the lowest low,” said Phoebe Gilpin, senior director of formal learning at the laid-off Sesame Workshop. “It was a moment of joyful celebration, excitement and emotional whipping.”
Of the seven workers who spoke at the meeting, six quickly learned they had been fired, said David Hammer Hodges, director of the United Nations organization of the local chapters and professional employee workforce in the office, the union that workers are about to join.
A spokesperson for the Sesame Workshop said the job cuts were planned and fully determined before recognizing the intentions of staff organising.
The leadership of the Sesame Workshop shows that it is not voluntarily aware of the union, but Hamer-Hodges said the union's efforts will continue.
In an interview, Chief Executive Officer Westin said the nonprofit will take new steps to find ways to fund jobs, including “additional philanthropy development.” Even if revenue from the new distribution agreement is smaller than the HBO agreement, there is a greater chance that the show will be available free of charge at more homes than the maximum, as before.
“We're sure we'll get through this and we're sure more kids will have access to 'Sesame Street' more than ever,” Westin said. “The world needs Sesame Street more than ever before, so that's important. ”
Gilpin said the wider changes in the children's media left an uncertain future for her and her departure colleagues.
“'Sesame Street' has been a very stable force in children's media for a long time,” she said. “People who have worked throughout their entire careers are now facing a landscape that is not very friendly. If what I'm doing is a child's media, where can I go to continue doing this? There are not many places to go.”
