Peter Kafka

Recent Posts by Peter Kafka

Can “One Life to Live” Get New Life on the Web? Here’s the Pitch:

The Internet is flooded with an endless variety of video, but in the end it all breaks pretty cleanly into two categories: There’s the made-for-the-Web stuff that dominates YouTube, and there’s the made-for-TV stuff that dominates Hulu.

YouTube is trying to change some of that with its “channels” strategy, but Jeff Kwatinetz has his own plan for a middle route: The Hollywood producer is trying to make new episodes of shows that used to be on TV, and show them on the Web.

Kwatinetz and his Prospect Park production firm want to take two long-running ABC soap operas — “All My Children,” which went off the air in September, and “One Life to Live,” which will end in January —  and start making new episodes that should look and sound exactly like the originals. Except you’ll need a broadband connection to watch them.

If you’re one of the people who thinks many folks no longer make a distinction between stuff they watch on TV and stuff they watch on the Web, this will make perfect sense. But Kwatinetz has yet to win over enough financial backers, which is why he’s now talking to people like me, hoping we’ll help him make his case.

I don’t have a dog in this fight, except that I do think it’s an interesting idea. And I’m quite sure that someone will take a stab at it soon.

Netflix, for instance, has noodled around with the notion, and may end up trying the same strategy with “Arrested Development,” a former Fox comedy beloved by a relatively small group of fans.

So let’s quickly run through Kwatinetz’s pitch:

Cost: An average hour of one of his soaps currently costs ABC around $160,000 to make, which is outrageously cheap for TV and fantastically expensive for the Web. But Kwatinetz says he’s not going to be able to save much money when he moves the shows online — he’ll still be paying the same writers, actors and production staff. Overall, he figures he’ll need around $80 million to produce both shows for a year, and $65 million in hand to start up production.

Audience: Both shows averaged around 2.5 million viewers an episode on ABC this year. But Kwatinetz thinks he can make a profit if he can just bring 10 percent of those eyeballs to the Web. That doesn’t seem outrageous, given the commitment that some soap viewers make to their shows.

And in case you were wondering — yes, people who watch soap operas watch online video, too. Here’s a chart from a research deck Kwatinetz and his partner Rich Frank use in their pitch. It’s data from research firm Frank N. Magid Associates, which shows that about half of soap viewers (and ABC soap viewers in particular) are likely to watch Web video:

Revenue: This is the part that requires the biggest leap of faith. Kwatinetz figures that if Web TV portals like Hulu can command $40 CPMs for their stuff, he can, too. Particularly because his episodes will be new, not reruns that aired days earlier. He also figures he can resell the shows to traditional cable down the road, and/or sell them via distributors like Apple’s iTunes.

But there’s a reason that no one is making video with TV-level budgets for the Web yet, and that’s because ad buyers aren’t paying up consistently for it. YouTube’s new plan, for instance, assumes that its channel partners will spend considerably less than $100,000 per hour to make their stuff for the site. And the stuff that runs on Hulu isn’t dependent on that advertising revenue — it’s built with TV ad dollars in mind.

Compared to some pitches we’ve seen win funding in the last couple years, this one seems almost conservative. But Kwatinetz still doesn’t have all of the cash he needs to go forward.

“A lot of the investor pool that we go to are people with Hollywood backgrounds,” he says. “And while we feel that it’s obvious that convergence is here, we’ve met with an unusual amount of skepticism. So now we’re going out to Silicon Valley, and they seem to get it.”

Kwatinetz would like to have his shows up and running as soon as “One Life to Live” ends in mid-January, but unless he starts very soon, it will be hard to hit that deadline. For the record, here’s the rest of the Magid research, which won’t surprise people who read this site. But apparently it’s still an eye-opener for some.

Magid Daytime Soap Pres PP 100611 Rev


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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work