Disney Surfs Web for ABC Soap Opera Solution

by Jonathan Berr | July 9, 2011 7:33 am

When The Walt Disney Co.’s (NYSE: DIS[1]) ABC TV network announced in April that it was canceling two of its iconic soap operas, many viewers considered it to be the end of an era. Now, it looks like a new one has begun.

“All My Children” and “One Life to Live” will have a new life after their cancellation on the network in September 2011 and January 2012 respectively — in cyberspace — under a creative licensing agreement with Prospect Park, a closely held production company behind the hit cable show “Royal Pains.” The programs will be distributed on platforms such as Internet-enabled television.

According to the Los Angeles Times,[2] the deal gives Prospect Park “exclusive rights to the two shows for more than a decade, and pays Disney millions of dollars a year in royalties for as long as the shows are produced.” For Disney shareholders, this lemon just became lemonade. “All My Children” and “One Life to Live” will be making money instead of costing money. The experiment also might serve as a template for other television networks, which continue to struggle with the changing economics of television. For instance, News Corp. (NYSE: NWS[3]) recently said it was canceling “America’s Most Wanted,” the long-running fixture of Fox’s Saturday night line-up because it hadn’t earned a profit for years. “General Hospital,” another ABC soap, might be the next to travel to cyberspace, as Katie Couric’s new show[4] will take its 3 p.m. time slot in many markets when it debuts in September 2012.

Soap Operas attract a niche audience of devoted fans but no longer are economical to produce in the current media environment. However, soap viewers might be willing to follow their favorite stories on their computers and mobile devices. Otherwise, fans are out of luck. Disney announced in 2010 that it was pulling the plug on its SOAPnet cable TV network, and “Guiding Light “and” As The World Turns” were canceled by CBS (NYSE: CBS[5]) in 2009.

Audiences for daytime serials have been in decline since networks interrupted their broadcast for the 1995 O.J. Simpson murder trial. Their downfall was hastened by changing viewing habits, including the rise of primetime soaps such as “Desperate Housewives.” Oprah Winfrey and other talk show hosts eroded the audience for soaps. Moreover, these programs were far cheaper to produce than the daytime dramas. Many local TV stations are replacing “The Oprah Winfrey Show” with low-cost local news programs rather than soap operas.

According to TV By the Numbers[6], “All My Children” attracted 462,000 female viewers aged 18  to 49,  tying a previous low from March.   That is the key demo adverting who buy commercials on these programs care about.

“One Life To Live” had 659,000 viewers in the target demo. Ratings for “All My Children” recently hit a low. Meanwhile, comparable viewership for “The Price Is Right” is about 670,000 and The View” is about 763,000 in that key female demographic (though obviously overall viewership is larger).

Soaps might live to fight another day, which is good news for viewers and shareholders.

Johnathan Berr owns stock in Disney.

Source URL: https://investorplace.com/2011/07/disney-dis-surfs-web-for-abc-soap-opera-solution/

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