Company Town : TV’s ‘Sesame Street’ Creators Want Their Own Niche on Dial

Children’s Television Workshop, the production company behind “Sesame Street” and other educational programs, is seeking a spot for itself on the 500-channel cable dial of the future.

The New York-based, not-for-profit corporation says launching its own channel is the only way to ensure a home for its highly acclaimed shows, which are often passed over by networks in favor of more commercially successful fare such as “Mighty Morphin Power Rangers” and “Animaniacs.”

The most recent example came in February, when ABC canceled the workshop’s scientific cartoon series, “Cro,” after two seasons, even though it was the ratings winner in its time slot.

“The lesson for us was that we can’t rely entirely on other channels to put on programs which are educational as well as entertaining,” said Gary Knell, a senior vice president at Children’s Television Workshop.

A handful of cable channels--including the Learning Channel, Nickelodeon and the Disney Channel--already devote a few hours of their lineups to children. But Children’s Television Workshop believes it can use its brand name--made famous by “Sesame Street’s” Big Bird, Oscar the Grouch and Ernie & Bert--to carve its own niche on the dial with shows that emphasize educational content.

“There needs to be a place in the 5-gazillion-channel universe for educational programming that entertains kids as an alternative to Nickelodeon,” Knell said. “We think we have a track record that we can create attractive programming which will engage kids and (make them want to) turn to it.”

While most would agree that theirs is an honorable goal and that more educational programs for children are needed, some analysts and industry executives wonder whether CTW has the financial resources and expertise to create a viable channel in the cutthroat world of cable television.

“The problem with Children’s Television Workshop is they’ve never made the profit motive their end-all and be-all,” said Lee Isgur, an entertainment analyst at Jeffries & Co. in San Francisco.

CTW--which reported a $5.8-million deficit last year and has not been in the black since 1992--hopes to solve that problem by finding corporate partners for its cable channel, and it has plans to hire a Wall Street investment bank to help with that mission. Preliminary discussions with cable operators have encouraged CTW’s management to aggressively pursue its channel plans, Knell said.

The channel, tentatively named “New Kid City,” is scheduled to launch sometime in 1997 with about 12 hours of programming a day, Knell said. It would become home to nearly all of CTW’s programs except “Sesame Street,” which would remain at PBS, where it can reach the widest audience.

Knell emphasized that New Kid City is not meant to replace public broadcasting, often the last resort for educational television shows. “This is not an excuse to de-fund public television,” he said. “This is just another venue for educational, entertaining programming.”

Knell is also skeptical that the Federal Communications Commission’s proposal to require networks to broadcast a minimum amount of educational shows for children will lead to high-quality programming.

CTW’s library includes episodes of “Electric Company,” “Ghostwriter” and “3-2-1 Contact,” programs that teach children to read and write and encourage them to think creatively. The new channel will also acquire children’s educational programs from other sources and fold in the workshop’s ventures in publishing, educational games and multimedia, Knell said.

Talk of launching a channel gained momentum in late February after ABC announced it would cancel “Cro,” a cartoon series that stars a woolly mammoth and his Cro-Magnon friend. The pair relate their Ice Age adventures and introduce children to basic concepts in science and technology. (The program was partially funded by the National Science Foundation.)

According to researchers hired by CTW, children who watch “Cro” have learned about gravity and other scientific principles, Knell said. Nielsen ratings indicate “Cro” was watched by at least 750,000 children on Saturday mornings.

But ABC-TV reportedly plans to replace the program next season with an animated version of “Dumb and Dumber,” the hit movie starring comedic actor Jim Carrey. ABC officials did not return calls seeking comment.

Isgur said that winning one’s time slot may not be much of an accomplishment if a program fails to build an audience or could not survive in a more competitive slot.

CTW’s failure to realize that is just one of the ways in which the workshop underestimates the complexity of running a cable channel, said Jim Boyle, vice president of Discovery Communications, which runs the Discovery Channel and the Learning Channel.

“It’s very hard to start a cable channel, especially if you’re starting from scratch,” Boyle said. “You don’t have the cost efficiencies of having an affiliate sales group in place. You don’t have existing relationships, and you don’t have another network to cross-promote on.”

Right now there are too many would-be channels competing for too few spaces on the cable dial, but over the next two years that is likely to change. Still, new channels such as New Kid City “will reach only a very small slice of the cable universe at first, maybe only 10 million homes in 1997,” Boyle said. “To be considered a major player on Madison Avenue, you’ve got to have 40-million distribution.”

And although starting a channel is a reasonable way for CTW to solve its distribution problem, the workshop may find that its problems run deeper, Isgur said.

“It’s a lot like the author who can’t get published, so he goes to the Ego Press and pays someone to publish his book,” he said. If there is not enough interest in CTW-style shows, “it doesn’t matter whether they start their own channel or not.”

Nevertheless, Discovery’s Boyle said, CTW could be a formidable competitor.

“If you have boring, talking-head kinds of educational programming, it isn’t going to work for kids,” he said. “Children’s Television Workshop certainly knows that. They’ve been pros for 25 years at developing quality educational programs that kids want to watch.”