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Media & Entertainment

Sony paves way for return of Sesame Street to Japan with new deal

Exclusive: Games and music tie-ins to follow as group regains rights to brand

TOKYO -- Sony Group has acquired the rights to the Sesame Street children's characters in Japan following a 17-year hiatus, with plans to bolster its entertainment business with fresh content from merchandise to video games, Nikkei has learned.

Sony Creative Products, which manages intellectual property rights for the group, signed the licensing agreement with Sesame Workshop, the U.S. nonprofit behind the brand. One aim is to put the series back on the air in Japan.

The move underscores Sony's concerted focus on entertainment, which generates roughly half of the group's sales through a combination of video games, music and movies.

Global competition for content has heated up, pitting the Japanese group against the likes of Walt Disney Co., Netflix and Microsoft. While tech giants are better funded, Sony is able to tap a gamut of operations under its umbrella.

"In addition to conventional licensing, we want to work with the entire Sony Group this time to create business opportunities," SCP President Ken Ohtake said.

Recent entertainment deals by Sony include buying U.K. podcast developer Somethin' Else, investing in Fortnite creator Epic Games and acquiring anime streaming service Crunchyroll.

Sony previously held the rights to Sesame Street in Japan from 1989 to 2004, focusing on selling branded merchandise. This time it will start with apparel and other goods, then expand its partnership with Sesame Workshop into a variety of fields.

Sesame Street became part of the public broadcaster NHK's regular programming in 1971 to help people learn English, picking up fans across age groups. But NHK stopped airing the series in 2004, and TV Tokyo, which took over, also dropped the show in 2007.

Working with Sesame Workshop to create content tailored to Japanese audiences, SCP will push Japan's broadcasters to restore Sesame Street's place in regular programming. A challenge for the series in Japan will be shoring up its recognition and popularity, which has flagged since it went off the air.

Japan-specific content could appear not only on TV, but also be streamed online for a fee. In the U.S., new Sesame Street episodes are first made available on HBO Max, a subscription service, before airing on the public broadcaster PBS.

Music by Sony-affiliated artists offers other possible business opportunities, featuring Sesame Street characters, as do educational games for mobile and PlayStation.

Since Sony last held rights to Sesame Street 17 years ago, the group has shifted its focus from electronics to entertainment. SCP has found some success with licensing overseas brands. It acquired rights to Peanuts in 2009 and Peter Rabbit in 2012, more than doubling its revenue in Japan within five years.

With its bid to revive Sesame Street in Japan, the company aims to double its merchandising revenue in the country in three years to about 8 billion yen ($72.3 million). It aims to increase exposure for the brand through events and other efforts.

Sesame Street began airing in the U.S. in 1969. The brand's operator, Sesame Workshop, is present in more than 150 countries including Japan, where it works with local authorities to create educational content for schools.

As an educational nonprofit, Sesame Workshop has worked to raise awareness about diversity and other social issues. The U.S. version of the show, for example, has featured characters with autism and a parent dealing with addiction. Sony hopes to create Japan-specific characters and other content to promote diversity as part of its efforts to meet the United Nations' Sustainable Development Goals.

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