Muppets Changing the World - Part 1

Gary Knell has a permanent twinkle in his eye. And why not? He’s a 54-year-old guy who goes to the office every morning to teach 70 million kids to read with the help of an eight-foot yellow bird. Sure sounds to me like a lot more fun than selling municipal bonds.

Knell is Big Bird’s boss, not to mention Kermit, Cookie Monster, and the goofy, glorious Elmo. He’s the CEO of Sesame Workshop, the non-profit educational organization that brings your pre-schooler Sesame Street each morning. I dare say every single kid in America—and their parents—know where Oscar the Grouch lives and can sing Ernie's “Rubber Ducky” song.

But all is not just sunshine and happy songs on Sesame Street these days. Sometimes, it’s more like trench warfare. “In 1988, there were two pre-school shows in the United States, Mr. Rogers and us,” Knell says. “Today there are literally fifty pre-school programs on TV, plus six competing networks.”

Sesame Street is still the number one show for kids 2-11 in the New York DMA (where I live), according to the A.C. Nielsen ratings for February, but it’s closely followed by Mickey Mouse Clubhouse on the Disney Channel, and Ni Hao, Kai-lan and Dora the Explorer on Nickelodeon. Nickelodeon, Disney, Noggin, Discovery Channel, TLC, and the Cartoon Network basically ran the commercial broadcasting stations out of the kids television business several years ago. Is Sesame Street next?

Not if Knell and his little staff of 350 have anything to say about it. With their measly annual budget of $125 million, they go toe-to-toe with the mega-media likes of Disney (annual revenues $36 billion), Viacom ($13 billion), and Time Warner ($46 billion) every day, vying for the attention of all those three-year-old consumers in an electronic universe with hundreds of TV channels as well as DVD’s, web sites, cell phones, and video games. To win, Knell has led the organization into new media with a vengeance since he took over as CEO in 1999.

You’ll find Sesame Street everywhere on the web, starting with SesameStreet.org. “You have access to 2,000 video clips in perfect digital quality that are catalogued by curriculum and by character,” Knell says with a trace of wonder in his voice. “If you want to teach your kid to count backwards, for example, you can call up a video with Count von Count. We view that as our channel of the future.” The brand is also a big draw on YouTube—a segment with Chris Brown and Elmo last year drew over five million views.

According to Knell, Sesame Workshop had the #1 podcast on the web last year, too. “Word on the Street” on iTunes uses Conan O’Brien, Brian Williams, John Stewart, and other well-known media personalities to help kids build vocabulary by playing with a word of the day along with a Muppet. Don’t be surprised if you see a mom holding her cell phone in front of a kid in the supermarket checkout line—she’s probably showing them a Sesame Street clip.

Then there is video on demand: “You can pull down Sesame Street and play it back for your kids while you’re cooking dinner,” Knell points out enthusiastically. He says a million moms and kids download Sesame Street through Comcast alone each month.

Dave Donelson, author of Heart of Diamonds