Sesame Street Moves to HBO: Can you tell me how to get to brand promise?

On August 13, 2015, two worlds collided – that of struggling public television with the ever-growing market of digital video streaming services.

That Thursday, HBO announced a five-year deal with Sesame Workshop – the nonprofit group behind “Sesame Street” – allowing the premium cable network exclusive first-run rights of all new episodes before they will be broadcast for free on PBS nine months later.

After providing a home for “Sesame Street” for the last 45 years, PBS was finally unable to increase its payments for the iconic children’s program and had to cut back on production and licensing costs.

While the new partnership increases the annual episode count from 18 to 35, it raises one important question:

Has the goal of “Sesame Street” not always been to educate children regardless of their economic status?

Now, with exclusive availability to families who can afford an HBO subscription, this will no longer be true. While one could argue that it doesn’t matter WHEN kids see the program, but only THAT they see it, the new arrangement could very well have an impact on the content itself if producers of the show consider a more “timeless” approach avoiding current topics that might not be relevant nine months after the original air date.

Tim Winter, president of the Parents Television Council, said that, “In order to watch original episodes of the most iconic children’s program in television history, parents are now forced to fork over about $180 per year and subscribe to the most sexually explicit, most graphically violent television network in America. I can’t imagine a greater juxtaposition in television than this.”

This brings up another question that, in fact, every business owner will have to answer at one point: “What is your moral obligation to the customer?”

When launching a new business, founders should clearly define what their mission and brand promise will be. That, along with the vision statement and core philosophies of the company, will act as the guiding principles defining not only WHAT the business stands for, but also WHO it attracts and represents.

Determining, reaching, and maintaining a target audience can easily turn into one of the most challenging tasks any business will face. That’s because it affects every aspect:

• What is the exact product that your target audience will respond to?
• Where can you reach your target audience (marketing and distribution) and how do you get them to purchase (sales)?
• How much do you spend on building the product and how much do you charge your customer for it (business model)?
• And who or what is funding the whole venture?

The “Sesame Street” transition to HBO is a perfect example of how making one little change in a delicate business formula can affect every single aspect of the overall model.

With a slightly different target audience (affluent families instead of general public) due to the fundamental change in the program’s distribution model, the product will most likely have to adapt as well (e.g. more commercial and less educational), which will affect how “Sesame Street” will be promoted, sold, and funded, thus, changing the core business altogether.

As a result, abandoning the original brand promise might turn off certain audience segments and hurt the value of the entire “Sesame Street” brand in the long run.

To avoid a potential downfall like this, it is absolutely crucial for business owners to think long-term and clearly define their core values from day one to build a solid foundation for a sustainable business model that can fulfill the moral obligation to customers while continuing to meet financial goals.

Since its inception in 2010, a total of 28 U.S. States have offered businesses to become “B Corps” (Benefit Corporations), which are a new type of company that uses the power of business to solve social and environmental problems. While traditional corporations’ main (and legal) goal is to generate profit – the opposite being nonprofit organizations – B Corps give companies the right to make both profit as well as social consciousness part of their legal obligation. This means shareholders and other sources of funding cannot force the company to change course merely based on financial interests.

This is definitely something to consider for any business owner… and maybe also for Sesame Workshop.

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