When Nostalgia Pays: Investing in the Heart of Children’s Entertainment
For over 50 years, Sesame Street has been the gold standard in educational children’s programming. Generations have grown up humming “Elmo’s Song” and adventuring alongside Big Bird and friends. But beyond its cultural legacy, the show’s music catalog is proving to be a savvy investment.
In a recent Royalty Exchange auction, a catalog of songwriting and screenwriting royalties linked to Sesame Street, An American Tail, and The Land Before Time sold for $580,000. This wasn’t just a purchase of songs—it was a slice of TV and film history with enduring income potential.
What made this particular catalog so valuable? Let’s walk down memory lane (cue the theme song) and explore why kids’ entertainment royalties can offer impressive returns.
The Asset: Royalties from the Street and Beyond
- Final Sale Price: $580,000
- Top Earning Tracks: “Elmo’s World” and “Abby’s Flying Fairy School”
- Earnings (Last 12 Months): $108,500
- Rights Included: Songwriter and publisher royalties (public performance, mechanical, sync)
- Additional Royalties: Screenwriting residuals for An American Tail and The Land Before Time
- Term: Life of rights (estimated 64+ years)
This catalog isn’t just limited to Sesame Street. It includes royalties from animated classics like The Land Before Time (yes, the one that made you cry as a kid) and An American Tail (which introduced the world to “Somewhere Out There”).
How Does This Asset Make Money?
- Public Performance: Every time Sesame Street airs on TV or streams online.
- Mechanical Royalties: Earned when songs are streamed or purchased as downloads.
- Sync Royalties: When songs are licensed for spin-offs, home videos, or movies.
- Residuals: Screenwriting fees from re-airings of shows and films.
- Profit Participation: Revenue from DVD sales and streaming platform licensing for films.
In 2016 alone, Elmo’s World earned over $25,000 and Abby’s Flying Fairy School brought in $10,000, despite these segments no longer appearing in new episodes.
Why Investors Were Drawn to This Auction
1. Cultural Permanence
Since its PBS debut in 1969, Sesame Street has broadcasted in over 150 countries and continues to adapt, now airing new episodes on HBO Max. Characters like Elmo and Big Bird have become permanent fixtures in children’s lives, ensuring ongoing public performance royalties.
2. Diverse Royalty Streams
This catalog offers more than just music royalties—it includes TV and film residuals. The inclusion of movies like An American Tail and The Land Before Time adds significant value, as these films still earn revenue decades after their release.
3. Sync-Friendly Content
Children’s media is a prime candidate for sync licensing. Songs and soundbites from Sesame Street often appear in educational apps, commercials, and even meme culture, driving additional income.
4. Multi-Generational Longevity
Kids who grew up with Sesame Street are now parents introducing the show to their own children. This cycle of nostalgia ensures that demand for the content—and its music—remains strong.
Bidding History: From $430,000 to $580,000
The auction opened with a starting bid of $430,000 and escalated quickly thanks to $10,000 bidding increments. After several rounds, the final accepted bid reached $580,000.
Notably, this auction wasn’t just about financial returns—it carried emotional value. The catalog’s royalties came from Tony Geiss, a prolific Sesame Street writer and composer. The proceeds from the sale were donated to 10 charities, including the Nature Conservancy and Doctors Without Borders.
Pros and Cons of Investing in Children’s Entertainment Royalties
Pros:
- Consistent Demand: Educational shows like Sesame Street are evergreen and continually streamed by new audiences.
- Multiple Revenue Streams: Public performance, streaming, and sync royalties provide diversified income.
- Life of Rights: This catalog offers royalties for the lifetime of the works—an estimated 64+ years.
Cons:
- Media Landscape Shifts: Changes in streaming policies or media partnerships (e.g., PBS to HBO) could impact future earnings.
- Concentration Risk: A significant portion of earnings comes from a few standout segments like Elmo’s World.
- Residual Payment Fluctuations: Film and TV residuals can vary depending on when and where content is re-aired.
Why the Winning Bidder Likely Saw Long-Term Value
- Cultural Legacy: Few shows have the brand recognition and multi-generational appeal of Sesame Street.
- Proven Revenue Growth: Despite its age, the catalog’s annual royalties have remained robust, with sync fees alone totaling $14,000+ in one year.
- Steady Licensing Opportunities: With streaming giants like HBO Max offering Sesame Street, the catalog benefits from stable platform deals.
Final Thoughts: The Business of Big Bird and Beyond
The $580,000 sale of Sesame Street and classic kids’ movie royalties shows that childhood nostalgia isn’t just sentimental—it’s profitable. With diverse income streams and multi-generational appeal, this catalog represents a powerful passive income opportunity.
Whether you’re an investor looking to diversify or a music enthusiast drawn to the magic of Big Bird and Elmo, royalty investing proves that some tunes never go out of style—and they can keep earning for decades.
On Royalty Exchange you can sign up as an investor and search through thousands of music catalog listings that include producer and songwriter royalties to some of the biggest songs of the past few decades. Discover why song royalties are one of the best investments to grow your wealth in 2024 and download the free Ultimate Guide To Music Royalties to learn everything you need to know about investing in royalties.
