A couple years ago Mitt Romney threatened to fire Big Bird and America rose up in arms against then-Republican presidential nominee. Today, much of America is in arms over the thought of Big Bird making it big.

The eight-foot tall character, along with the rest of the Sesame Street cast, is leaving PBS and is heading to cable, the Sesame Street Workshop announced last week. Yet what might have been lost in the outrage and melancholy about the privatization of a show that has been a defining American childhoods for decades is that the streaming companies are taking their fight for eyeballs and subscription fees to a whole new frontier: children’s programming.

Thanks to the deal announced on Thursday, HBO will now have exclusive rights to any new episodes of Sesame Street for nine months. After that PBS – home of the show for the past 45 years – will get to stream them free of charge. It might be true that most children do not care if they are watching old episodes or the new ones.(No spoilers please, kids with HBO.)

They might, however, care that the only place to get Sesame Street on demand in the future might be on HBO. As part of the new deal, Amazon and Netflix will no longer be able to stream it.

The streaming war’s new frontier: children’s programming

Americans have been increasingly cutting the cord. In 2014, there were about 7.6m US households that no longer subscribed to cable. From 2010 to 2014, the number of cord cutters who relied on the internet for their news, TV shows and at binge-watching sessions increased by 44%.

As people turned their backs on cable, they embraced streaming services like Hulu Plus, Netflix, Amazon Instant Video and Apple TV. HBO was not far behind – striking a deal with Apple TV to launch a standalone HBO Now streaming service to be available on the device for just $14.99 a month.

“All in, there are 80m homes that do not have HBO and we will use all means at our disposal to go after them,” Richard Plepler, chairman and CEO of HBO, said at that time.

Yet there was one problem: most of HBOs shows are for adults.

In the meantime, Netflix has been beefing up its offerings for kids. In addition to streaming of the Sesame Street, they partnered with PBS, Disney Channel, DreamWorks, Cartoon Network, Mattel, Hasbro, Lego and Scholastic to bring children’s programming to the 24/7 world of online streaming. Netflix, which has a feature that includes “Just for Kids”, has also invested in original programming through reboots of shows like Inspector Gadget, Danger Mouse, Care Bears and The Magic School Bus.

Amazon, too, has a series of original children shows available for streaming. In fact, this year both Netflix and Amazon were nominated in preschool category at the Daytime Emmys – Amazon for Tumble Leaf and Netflix for VeggieTales in the House.

And now, HBO has burst on to the scene, claiming one of the most in demand shows and making it part of its lineup. The competition is fierce.



The real winner of the deal between Sesame Street and HBO is, of course, HBO. But the children benefit, too. After all, this deal ensures that the show will continue to be produced and be available on PBS – albeit with a nine-month delay for those unable, or unwilling, to pay for an HBO subscription.

Who loses? Netflix and Amazon, since up until now about two-thirds of children have been watching their shows on demand.

Let them stream! Ensuring the survival of children programing

Early October 2012 was a dark time for PBS supporters, many of whom were upset over Mitt Romney’s remarks during the 3 October presidential debate.

“I’m sorry, Jim,” Romney told debate moderator Jim Lehrer. “I’m going to stop the subsidy to PBS. … I like PBS, I love Big Bird. I actually like you, too. But I’m not going to – I’m not going to keep on spending money on things to borrow money from China to pay for.”

It didn’t take long for Barack Obama’s re-election campaign to say that Romney was planning to fire Big Bird. In the days that followed, The Sesame Workshop, which produces Sesame Street, took to its website to calm fears about Big Bird’s job security.

“Sesame Workshop has created a financially sustainable model to fund production of our educational programming here and around the world,” wrote Sherrie Westin on Sesame Workshop’s website. According to her, the public was often mistaken about the amount of funding that PBS receives. “A CNN poll said 7% of the American public think that PBS gets as much as half the US budget! Thirty percent think it’s 5%. In reality, it’s 0.014%.”

Sesame Workshop has been able to fund a large part of its work with licensing fees for toys and merchandise like DVDs as well as donations from viewers and other organization. In 2010, just 5% of its revenue came from government funding, according to PolitiFact.

And while Big Bird could continue to keep his job without government assistance, he might have had to tighten his belt as the show’s budget got smaller and smaller.

The reason? Streaming had “disrupted” the sustainable model the workshop had created and cut into its revenue.

Jeffrey Dunn, CEO of the Sesame Workshop, told CNN that he had spoken to PBS about its shrinking budget and said “there was no way they could step up and make that gap up”.

While the partnership with HBO could be viewed as sort of a lifeline, streaming is also partly to blame for the situation the show has found itself in. Streaming meant that DVD sales dropped, and with it the revenue that helped finance the show.

“The losses just kept getting bigger,” Dunn told CNN. “It was like, ‘If we don’t find another way to replace this revenue stream, then we either have to shut the show down or ... It was a difficult situation.”

According to him, Thursday was a “big and bright day” because Sesame Street gets to go on.