How ‘Sesame Street’ Bounced Back — and Reinvented Its Business

There was a period of time when the future of Sesame Street was far from sunny. In late 2024, HBO opted not to renew its output deal for new episodes of the long-running children’s show, and it was put in a state of limbo.

A few months later, the Trump administration launched an effort to gut federal funding for public media. Sesame Workshop ultimately shed staff “amid the changing media and funding landscape,” a spokesperson said at the time.

“The media landscape had changed quite drastically during those 10 years, so we recognized that we were finding ourselves in a very fragmented media environment, and as a result of that — knowing that we have to reach to teach, knowing that for our educational media value to deliver the impact we want it to deliver — that we had to think about what that meant for building a new distribution strategy,” says Joseph Giraldi, Sesame Workshop’s COO, in an interview with The Hollywood Reporter.

What followed was a quiet but radical transformation of Sesame Workshop and Sesame Street, and a rethinking of where and how the brand needs to show up.

The end result?

“Big Bird doesn’t live on one street anymore,” Giraldi quips.

Sesame Workshop would cut a flurry of deals over the coming months, with the coup de grace being May’s announcement that Netflix would become the subscription streaming home for new episodes of the show … with those episodes also debuting on PBS Kids the same day.

The Netflix deal effectively replaced the HBO deal, delivering a financial lifeline and global reach to Sesame Workshop at a time when it needed, while also helping the streaming giant bolster its library with some of the best-known IP on planet earth.

“When we think about — especially our youngest viewers — we’re really servicing two audiences,” says Heather Tilert, head of kids and family series for Netflix. “We’re serving kids who we want to ensure fall in love with all the characters we bring to the service. Obviously, there’s a deep, deep history of kids’ love for Elmo and Cookie and Big Bird and Abby and everybody on the Street, and of course, we also want to make sure we’re creating a place that parents really trust, and there’s probably not another brand as singular as Sesame in signaling trust to parents because of the educational value and joy that they’ve brought both to those parents when they were kids.”

But the “public-private partnership” as Giraldi calls it with Netflix agreement to let the episodes appear day-and-date on PBS also made an impact (when Sesame was on HBO they ran on PBS months later).

“It just feels core to the brand, and also it is a different viewership than what we have,” Tilert says, nodding to the show’s origins on public TV. “So I think it’s a win-win.”

In fact, PBS is the only constant in Sesame Street’s 57-year history. Yes, even the street has moved. While the show was originally taped in Manhattan, it moved to Kaufman Astoria Studios (where the first two Marx brothers films were shot, and the original Paramount Studio was located) in Queens in 1993. Jim Henson’s Creature Shop, where the muppets that populate Sesame Street are created and maintained, is located just a few blocks away.

Dozens of films and TV series have come and gone from the studio, from Succession and Nurse Jackie to Devil Wears Prada and The Bourne Ultimatum, but whenever someone walks onto Stage J, they will be greeted by the familiar stoops and shops of Sesame Street.

The Netflix deal, as it turns out, was only the beginning.

A deal with YouTube for hundreds of classic Sesame Street episodes and a commitment to create YouTube-original programming followed, as did a deal with Tubi for a channel programmed with classic episodes, deals premised on reaching kids and families wherever they happen to be watching TV.

“We are thinking a lot about how we can make sure that we can meet families and children wherever they are,” Giraldi says. “That’s been really the north star that we’ve been orienting around, very intentionally thinking about the various distribution platforms that have become so much a part of children and families’ media consumption, and making sure that Sesame has an opportunity to play with each of those distribution platforms, so that we are as accessible as possible for children and families wherever they choose to consume content.”

“I think so many of us here at YouTube are so honored that we can play a role in Sesame Workshop’s storied mission of making kids everywhere smarter, stronger, and kinder, and that really means making sure that this incredible library of valuable content is accessible for all families, not just those with premium access,” says Katie Kurtz, managing director and global head of youth and learning for YouTube.

At the same time that Sesame Street was becoming more accessible thanks to its deals with Netflix and YouTube and continued relationship with PBS, Sesame Workshop also began to have more conversations with others who wanted to engage with the show’s iconic talent.

In the world of social media, collabs are common. In the world of TV, they have been less frequent. But Sesame has made a habit of surprising and delighting, not only bringing on the fun cameos that the show is known for, but having their muppets appear in surprising places … like during the halftime show at the FIFA World Cup final, or having Elmo and Cookie Monster travel Italy during NBC’s coverage of the Milan Olympics.

On YouTube, Sesame Workshop and Dr. Seuss Enterprises launched a crossover episode featuring The Cat in the Hat, Elmo, Abby and Cookie Monster, while Elmo has done singalongs with Ms. Rachel on her channel. Hasbro and Sesame recently concluded a Peppa Pig and Elmo collaboration on that brand’s YouTube channel.

“I love you know this idea of how Muppets can surprise you, how Sesame is showing up in places that are unexpected, that put a smile on your face,” Giraldi says. “There’s an incredible innate recognition in those partnerships and in those moments of how much Sesame has meant to all of these multi-generational audiences.”

“I have a niece and nephew who have both watched Ms. Rachel and Elmo help them prepare for the first day of school,” says Kurtz. “I only wish I had had Ms. Rachel and Elmo to help me prepare for the for the first day of school. So it’s wonderful to see them leaning into the ecosystem.”

In fact, executives at YouTube and Sesame note that Sesame Workshop hosts classes for YouTube creators, helping them to understand what goes into making a show that is educationally grounded while still being entertaining.

Tilert, meanwhile, notes that in her biweekly calls with Sesame executives they are talking about possible cameos from Netflix stars who can appear on the program (not an easy task given the monthslong lead-time in production), as well as potential special episodes.

“Who might we want to think about as guest stars? They’ll share ‘here’s who we’re thinking about’ and ‘here’s why.’ Is there anyone, you know, from the Netflix universe that might be interesting or ideas that we might have?” Tilert says. “We’ll talk about something as specific as that to like, ‘hey, we want to make a holiday special together. What might be an interesting lens for that?'”

Among the new offerings is a Sesame Street movie.

In a world with seemingly unlimited kids and family content, it can be hard to break through, but Sesame Workshop has navigated the rough waters of the changing world of media and emerged on the other side.

But to hear executives at the company and its many partners explain it, it’s the humanity of the show that has helped sustain it. No small feat, given that most of the cast is muppets.

Just look at the children’s Emmy the show won for a short-form video they posted to YouTube featuring Andrew Garfield and Elmo explaining grief.

“It is a master class in how to explain big emotions to little people, and as an adult, I also have experienced loss, and I do find that video instructive,” Kurtz says. “And I think it’s one of the things that they do so beautifully is help us see ourselves in the world in their content.”

Or how Abby Cadabby traveled to Spokane, Washington in the aftermath of devastating wildfires.

“We did an incredible event for all the families that were displaced as a result of those fires, and brought the Muppets and Abby into an environment where they could really bring some hope and a sense of comfort to those children and families who are dealing with what was a terrible situation there, and that was acted upon with incredible agility by the team to be able to pull together,” Giraldi recalls.

Sesame Street, it turns out, is wherever kids and their families want it to be.