All My Children a killer app?

All My Children a killer app? http://tinyurl.com/3ue2fmr

You may have heard the announcement that All My Children and One Life to Live (cancelled ABC Soap Operas) are heading to Internet distribution. (In this context “app” means use not literally a software application). He runs the numbers on whether or not this could work financially – something I’m always interested in.

Fifty million dollars is $192,000 per episode or $4,370 per finished minute based on 44 minute shows. That’s a lot of money but a lot less than primetime TV budgets. It’s also the absolute most any soap has ever cost with most costing less. Certainly there are some savings to be found in there. Let’s claim a 20 percent labor savings from moving to the Internet, bringing per minute costs down to $3,496.

Actually, there are plenty of additional savings. Some savings will come from lower labor costs as actors accept smaller paychecks as an alternative to retirement or unemployment. But an even greater savings will come from any Internet soap’s ability to offer online every episode ever broadcast — the long tail — at an effective production cost of $0 per hour.

If a third of Internet viewers are watching old episodes that drops the effective cost of new episodes by a third, so we are down to $2,342 per finished minute.

With sponsorship he brings it down to around $2,000 a finished minute and then compares it with the (rumored/reported) budgets for YouTube’s future professional channels.

According toVariety, YouTube will shortly bring some professional channels to its service with budgets of $1000-$3000 per finished minute.

My biggest concern about this particular example – not about the trend to Internet delivery and alternate funding in general – is that the target market for the Soaps may not be technically savvy enough to pick up and continue on the Internet.