Apple is partnering with Sesame Workshop, the nonprofit that backs "Sesame Street," CNBC reports. While "Sesame Street" is not part of the deal, sources tell CNBC that the new content will include live-action, animated and puppet series.

Why it matters: While Apple hasn’t gone public with many of the content deals it's striking to build out its video streaming service, this is the first kid-oriented project that's been teased.

Details: Kids content is a major selling point for streaming services trying to hook households as user-bases, as opposed to individuals. (Household is a typically reach metric used for television, while individual users are the typically reach metric for social media and messaging apps.)

Between the lines: Children's content has been a big focus for both Netflix and Amazon, which have wide catalogs of children’s programming including original content. Up until now, reports and statements have suggested that Apple has invested in high-end adult programming, featuring prominent actors and producers like Reese Witherspoon, Jennifer Aniston and most recently, Oprah Winfrey.

The bottom line: This puts them in a place to potentially compete with Disney's planned entertainment streaming service, which the company says will be aimed at families with children's content.