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HBO signs up Sesame Street in a five-year deal

Time Warner's HBO has appointed Oscar the Grouch and Elmo to lead its children’s programming, part of an effort by the premium cable network to expand its audience at a time when fewer young people are watching conventional TV.

The network announced a five-year deal yesterday with the non-profit educational group behind “Sesame Street” to carry new seasons of the popular children’s show.

The partnership will make the next five seasons of “Sesame Street” available exclusively on HBO as well as HBO Go and HBO Now, the network’s streaming services.

The deal will let Sesame Workshop produce almost twice as much new content as previous seasons and make the show available for free to PBS, the US public broadcaster, and its member stations nine months later.

Sesame Workshop will produce a “Muppet” spinoff series and develop a new original educational series for children for HBO, which has licensed more than 150 library episodes of Sesame Street, according to the statement.

While Netflix and Amazon subscribers have been able to watch old episodes of “Sesame Street,” that content will no longer be available on those services because of the HBO deal, according to Steve Youngwood, chief operating officer at the non-profit Sesame Workshop.

The partnership could help HBO, which offers movies and television shows like “Game of Thrones” and “Silicon Valley,” attract more subscribers as TV viewing moves online. The premium channel has been expanding its offerings to reach a broader audience, recently announcing a major content deal with Vice Media, which is popular with younger audiences, and hiring former ESPN commentator Bill Simmons to host a weekly program and produce short-form videos for its streaming services.

HBO’s web-only service, which was introduced in April, is seen as a competitor to Amazon and Netflix, which has been expanding its library of children’s TV programming.

In 2011, Netflix started a dedicated section for kids under 12 years old featuring TV shows and movies from the Disney Channel, Cartoon Network and others. DreamWorks is creating 300 hours of original kids shows exclusively for the streaming service, Netflix has said.

Rich Greenfield, an analyst at BTIG Research, said Netflix has retained subscribers by adding more children’s content, calling it “a critical glue” to its service.

HBO is following a similar strategy to keep subscribers interested in its new online service, he said. While canceling cable-TV service can be “painful,” it’s easy for people to drop online services like HBO Now if they don’t have enough content to appeal to all members of the family, especially children, Greenfield said.

“They have to expand the programming to make it stickier,” he said. “Otherwise it’s too easy when a show ends to disconnect for a few weeks.”

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