Battle for pay-TV subscribers hits the playground
The news is significant for PBS too, which has been forced to essentially acknowledge that the old way it does business is no longer feasible, Amobi said. "I would not be surprised if PBS was looking to move toward similar deals with other shows."
Sesame Workshop receives the bulk of its funding from product licensing agreements, but that figure has dwindled over the last few years along with DVD sales. It reported an operating loss of $11 million for 2014 and $5.7 million for the previous year.
Children are increasingly watching shows via streaming services instead of traditional television, Sesame Workshop said in a statement last week.
HBO has downplayed the idea that the motivation for the deal was to trying to duplicate the success Netflix and other streamers have had with kids shows. The pact is a rare move for HBO, which typically doesn't license programming, but it said it made the agreement because of the legacy of the program.
"There's no other piece of programming in the children's landscape that is as high quality and has a historical legacy to it that we feel fits with the HBO brand more than 'Sesame Street,'" HBO spokesperson Jeff Cusson told CNBC.