In 1995, 26 years after its first episode, Emmy Award-winning Sesame Street’s place in the pantheon of children’s television was no longer secure. Producers were anxious about the increasingly competitive landscape, lack of funding, and unstable viewership. If the show didn’t do something soon, Sesame Street would likely be bought, and the show's developers would lose creative control. They needed a deus ex machina to survive—or, it turns out, a fuzzy, giggly red monster.

The Road to Sesame Street 

Rewind to 1962: Joan Ganz Cooney, who was working in television production for New York’s WNDT, was appalled at the didactic programming being dished out to children, and believed there must be a way to engage children with television that entertained while it educated. A few years later, she and her key collaborator, Lloyd Morrisett, met at a dinner party and realized their shared passion for making better children's television. In 1966, they set about asking themselves: What if there was a show that could make children laugh while also encouraging diversity and imagination? 

Turns out, many deep-pocketed foundations, including the Carnegie Corporation (of which Morrisett was vice president), the Ford Foundation, and the Corporation for Public Broadcasting, shared their vision, and pledged funding to help Cooney and Morrisett achieve their goal. Add in the magic of Jim Henson’s creations, and Sesame Street was born. 

Cooney (second from the right) with the Sesame Street cast in 2009. (Astrid Stawiarz/Getty Images)


The show, featuring five of the future core Muppets (Big Bird, Oscar the Grouch, Bert, Ernie, and Cookie Monster) and their human neighbors, premiered to smash ratings in 1969, setting a new standard for children’s programming. By the time Elmo joined the ranks in 1979, Sesame Street attracted over 9 million pairs of young eyes daily.

Trouble in Paradise 

After decades of success, the early '90s had brought a slew of unforeseen challenges to the Street, beginning with the death of Jim Henson.

When Henson passed away in 1990, the Sesame Muppets were placed in a terrifying limbo: Henson had clearly said that the Sesame Street Muppets were to remain the property of Children’s Television Workshop. Disney, however, used Henson’s passing as an opportunity to try and claim all of Jim Henson’s properties, including Sesame Street, going so far as integrating the Muppets into Disney parks without the Jim Henson Company’s approval.

Meanwhile, Sesame Street was embroiled in a fight for viewers against a giant anthropomorphic dinosaur. With his singsong voice and simple philosophy of “I love you, you love me,” Barney was like a big, purple plush toy who reminded kids to brush their teeth. And by shrinking him down to child-size, adding a voice box, and sticking him on toy store shelves, Barney the lovable T-Rex opened up a whole new realm of possibilities for profit.

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Cooney recalled how the Talking Big Bird toy had financially bolstered the brand when the show’s ratings temporarily dropped in the ‘80s, so saw merchandising as her ticket back to success. But what could compete with Barney? 

A Monster to the Rescue 

Unbeknownst to Cooney, 53-year-old former Chicagoan toy maker Ron Dubren had already created the technology that would save her show.

Inspired by watching his kids laughing and playing at the park, Dubren and his co-creator Greg Hyman created a stuffed monkey that giggled increasingly hard each time you tickled its tummy. They sold their prototype to Tyco Toy Company in 1992, and the Tickle Me Chimp was refurbished into a Tickle Me Taz doll. Unfortunately, children found the snarling Tasmanian devil less than cuddly, and the toy never got off the ground. 

Dubren, Hyman, and their ticklish invention got their lucky break in 1995, when Tyco received a master toy deal through Sesame Street that gave them the rights to use the Sesame characters in their soft toy divisions starting in January of 1996. Tickle Me Elmo made his premier in July of 1996. While it outsold the competitor’s Talking Barney (also invented by Hyman!), there was no reason to think it would make toy history. 

That changed in October 1996 when Rosie O’Donnell introduced the toy to the studio audience of her daytime talk show (and those watching at home). The exposure this garnered the toy kicked sales into overdrive, and Elmo flew off toy store shelves across the country. Tyco, which hadn’t planned for the increased demand, couldn’t replenish stock fast enough. Sensational media coverage surrounding the shortage only added to parents’ panic, and by Black Friday of that year, chaos reigned as holiday shoppers did whatever it took to get their hands on the season’s most coveted item.

Those who came up empty-handed were desperate: A black market of price-gouged Elmos emerged, while charity auctions saw Elmos go for $3,500 or more. One of the biggest scandals of the holiday season centered on John A. Gotti (son of notorious mob boss John Gotti Jr. and a former mobster himself), who was rumored to have made off with an entire case of Elmos during a late night shopping spree at a New Jersey Toys “R” Us. 

Thankfully, the chaos subsided soon after the holiday season, and stores were able to restock shortly after New Year’s. 

The Aftermath 

The immense revenue generated by the giggling Elmo not only provided enough financial steam to spare Sesame Street from both Disney and the Jim Henson Company’s purchase by a German television studio, but it also allowed for a variety of new Muppet members to join the team—including a new sparkly female regular, Abby Cadabby (who joined in 2006). 

Post-Tickle Me Elmo, marketers were struck with a realization of their own. Before 1996, toy companies often looked at daytime TV as little more than a source of poor content and cheap entertainment for stay-at-home mothers. As a result, commercials during those hours targeted products for those mothers (things like Lysol, Purell, and fancy dish soap) rather than the children they were raising. 

The boom from Rosie O’Donnell’s pitch of Tickle Me Elmo inverted all that, creating what has now become a holiday tradition of talk shows dishing out the season’s “Must-Have Toys” while the toy-makers vie to be named one of Oprah's Favorite Things or for a five-second word of support from Ellen, Kelly Ripa, or friendly morning news anchors. 

And what about Elmo? Since his big toy premier, the furry Muppet has waltzed on the red carpet and debated in Congress. He made cameos on The West Wing, served as a judge on Top Chef, and has been parodied in everything from The Simpsons to South Park. But, most importantly, he can still be found talking and laughing with children every weekday on PBS.

Elmo, with Rosita (joined Sesame Street in 1991), gets a hug from first lady Michelle Obama. (Saul Loeb/Getty Images)