The nonprofit organization "Sesame Workshop," which produces the TV education program for children "Sesame Street," is facing a collapse due to attacks on public media in addition to cuts to its International Development Agency (USAID) subsidies under the Donald Trump administration. Above all, "Sesame Street" is in a precarious situation as it is falling behind in the quickly changing and highly competitive children's TV environment. Children are becoming engrossed in YouTube content and are losing out to competing programs such as "Cocomelon."
According to the New York Times (NYT) on the 24th (local time), Sesame Workshop laid off about 100 employees, which is around 20% of its workforce, a few weeks ago. Despite the layoffs, Sesame Workshop used $6 million (about 8.8 billion won) from its investment funds for the first time in 10 years to bridge the budget shortfall. If there are no additional cost savings, Sesame Workshop is projected to have a deficit of $40 million (about 58.8 billion won) next year.
"Sesame Street" is a children's program that has been aired in the United States since 1969, making it one of the longest-running programs on TV. Sesame Workshop, which is responsible for its production, is an institute under the Public Broadcasting Service (PBS) in the United States. It was introduced in South Korea in the early 1980s when AFKN began broadcasting it.
However, "Sesame Street" has experienced ups and downs due to changes in the media environment. Ten years ago, the sharp decline in DVD sales, which was a major source of revenue, put Sesame Workshop in jeopardy. Shortly thereafter, the U.S. cable channel HBO, which had only recently started its streaming service, revived the situation by paying $30 million to $35 million (about 44.1 billion won to 51.4 billion won) to air new episodes of "Sesame Street" as well as existing episodes. As a result, "Sesame Street" was able to add episodes each season, and PBS, which had originally aired "Sesame Street," had to broadcast it months after it had aired on HBO. Despite the controversies, Sesame Workshop ultimately showed financial success, recording a revenue of $271 million (about 398.3 billion won) and an operating profit of $20 million (about 29.4 billion won) in 2022.
However, as the streaming industry market changed, the deal with HBO ended. HBO's streaming service Max suspended its contract with Sesame Workshop last year, and the HBO executives announced at the time that "children's programs are not central to our strategy." In response, Sesame Workshop executives met with major streaming companies last April to initiate new contract negotiations. Although the executives expected to finalize a deal within a few months, it has been almost a year now and discussions with major streaming companies including Netflix, YouTube, and Amazon Prime Video are still ongoing without a contract being signed.
The NYT noted, "Sesame Street is at risk of disappearing in the rapidly changing toddler TV environment, and Sesame Workshop is struggling to figure out how to navigate the next few years while reorganizing the organization."