Disney’s SOAPnet channel headed for the drain

SOAPnet’s bubble has finally burst.

On Dec. 31, Walt Disney Co. will pull the plug on the cable channel it created 14 years ago to squeeze extra life from its popular daytime dramas.

But like all great soap opera characters, this one didn’t go down without a fight.

Disney announced three years ago its plan to fold SOAPnet to make space for Disney Junior, a channel for toddlers. That channel launched in early 2012, but cable and satellite TV operators weren’t ready to give up SOAPnet. They didn’t want to risk legions of vocal soap opera fans getting into a lather, or worse, moving to a rival service.

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So, for nearly two years, the Burbank entertainment giant has provided programming for both channels, including the one it doomed long ago.

“SOAPnet had a great run,” Ben Pyne, president of global distribution for Disney Media Networks, said in an interview Friday. “It served an audience of super-soap fans. And when given the opportunity, all of our affiliates kept the channel up and running.”

In the end, SOAPnet was a casualty of a shift in corporate priorities for Disney — and technology.

The channel, which launched in January 2000, was created to give working women the opportunity to catch up on their favorite soaps — “General Hospital,” “All My Children,” “The Young and the Restless” — at night after work. Other soaps were brought back from the dead for a second run, including “Ryan’s Hope” and prime-time dramas “Falcon Crest” and “Knots Landing.”

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The channel became a big moneymaker, allowing Disney to boost profits through additional runs of soap episodes, which brought in new viewers and advertisers, and programming fees from cable operators. Programming costs were modest. In 2010, its peak year, SOAPnet threw off $111 million in cash flow, according to consulting firm SNL Kagan.

“When SOAPnet launched, it was back in the videocassette-recorder days and you really could only record one episode at a time and you had to deal with all those cassette tapes,” said Ed Martin, a soap opera expert and editor at large of the independently owned site MediaPost. “SOAPnet made it easy to follow multiple soap operas at the same time.”

But the digital video recorder changed all that. Instead of the VCR hassles, it became easy for viewers to record multiple shows and watch the episodes at a more convenient time. Now nearly 50% of all homes with pay television have DVRs, according to Nielsen. Soap fans were among the earliest adopters, using the device to record and quickly watch multiple soaps by fast-forwarding through commercials.

The shift in consumer behavior made soaps less profitable for the networks. Audiences dribbled away, and advertisers migrated to other platforms.

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Now only four soaps remain on the broadcast networks: “General Hospital” on ABC, “The Young and the Restless” and “The Bold and the Beautiful” on CBS and “Days of Our Lives” on NBC. ABC ended the long runs of “All My Children” and “One Life to Live” nearly two years ago, and independent producers have struggled to remake the pair into shows for the Internet.

“I think SOAPnet also helped contribute to the decline in the ratings for soaps on the broadcast networks,” said Linda Marshall-Smith, founder of the website Soapdom.com. “With SOAPnet, people didn’t have to watch the shows during the day, they could watch them at night. And now, with all of these second screens, you can see the shows any time.”

SOAPnet is still available in 66 million homes. But in recent months, Disney has notified cable operators that it will no longer provide programming for the channel after Dec. 31.

The company stopped charging distributors a fee for SOAPnet months ago, as programming on the channel dwindled and programmers focused more attention on Disney Junior.

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To fill the empty hours, SOAPnet ran reruns of old network shows, “Gilmore Girls,” “One Tree Hill” and “Beverly Hills 90210.”

“Our company has been very strategic and thoughtful in how we use the networks we have,” Pyne said. “We want the programming we put on the air to be impactful.”

Disney Chief Executive Bob Iger, in an earnings call with analysts this week, sang the praises of replacement channel Disney Junior. The channel has been No. 1 for preschoolers since Nielsen began reporting its ratings in April, he said.

“Retail sales for Disney Junior products exceeded $1.8 billion in fiscal 2013, more than double the year before,” Iger said. “Going into the critical holiday season, Disney Junior toys are prominently featured on the retailers’ hot toy lists, and our top four retail partners are planning to double Disney Junior shelf space compared to last year.”

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