The Place To Place a Product

Ratings for soap operas used to be like the lives of their characters: up, down, up, down. But with fragmentation the rule of the day, ratings today are mostly down. That is making the business of daytime a challenge—soaps have lost between 20% and 40% of their viewers in recent years. So to stay profitable, soaps have become a big market for product placement.

“From a marketing perspective, daytime is the best audience,” says Angela Shapiro-Mathes, president of Fox Television Studios. She has a long history in soap operas, having run ABC Daytime and ABC Family. Shapiro-Mathes also founded Soap Opera Digest.

The relationships that soap-opera characters build with viewers are a marketer's dream. “The characters have credibility with their fans,” Shapiro-Mathes says. “If a character is eating Lay's Potato Chips, the audience goes out and buys them. That's how much fans want to identify with their favorite characters.”

In retail, a perfume has been created out of a storyline on All My Children. Disney Consumer Products worked with Wal-Mart to launch a fragrance called Enchantment, named after the cosmetics firm founded by Erica Kane (played by Susan Lucci). On the show, Enchantment took over Fusion, a rival perfume maker. ABC couldn't legally clear the name Fusion as a perfume, so it introduced Enchantment instead.

The perfume appears in storylines and also is available in Wal-Mart stores everywhere.

“We are working with Disney Consumer Products and Wal-Mart to develop other products and brand extensions,” says Brian Frons, president of ABC Daytime. “It's been a terrifically successful venture for us.”

Characters on soap operas have written novels, which have then become available for viewers to purchase. And clothes and jewelry worn on the shows occasionally have been offered via home-shopping channels, although that's not a business that has really taken off yet.

On ABC's One Life To Live, character Marcy Walsh wrote a book called The Killing Club. The novel was actually written by show writer Michael Malone, a novelist who has penned 11 books. The Killing Club was released by Disney-owned publisher Hyperion last week.

In the story, several people are murdered. Tying book and show together, Walsh will watch characters on One Life get killed in ways described in her book.

Don't intrude on the story

That's not the first time a show launched a novel. Passions solved the problem of being a new show with no backstory by releasing a book called Hidden Passions detailing the characters' histories to fill in gaps for viewers, says Sheraton Kalouria, senior vice president, Daytime Programs, NBC Entertainment.

Passions also included a storyline in which one of the characters sold Mark cosmetics, a new makeup line launched by Avon for younger consumers.

NBC also has included JC Penney, Frosted Flakes and EPT Home Pregnancy Tests as part of storylines.

While many shows welcome product integration, producers and executives try to be careful about how they craft deals and insert items into stories.

“I don't want these messages to get in the way of our storytelling,” Kalouria says.

That leaves a lot of room. Butterball turkeys have shown up on CBS' As the World Turns and Guiding Light. General Motors' OnStar global positioning system was featured on The Young and the Restless and General Hospital.

The trouble is, soap-opera viewership is down and has been for a while. “It all started with O.J.,” says Shapiro-Mathes, referring to the televised O.J. Simpson murder trial that occupied many afternoons in 1995. “That's when soaps really took a hit. Basically, O.J. was a much better soap. Once viewers stopped watching their stories, many of them never came back.”

In the past five years, soaps have experienced significant viewership erosion (with the exception of NBC's Passions, launched in 1999, aimed squarely at younger, urban women). Elsewhere, losses are steepest among 18-34 women, the audience advertisers covet most. With young women, ratings for soap leader CBS' The Young and the Restless dropped 50%. NBC's Days of Our Lives has lost the least of this audience, dropping 32% since 1999. And among women 18-49, ABC's Guiding Light has fallen the most at 40%, while Days is off the least at 21%.

Even just comparing this season with last reveals drops. Only ABC's All My Children, with a story about a woman searching for her lost baby, has shown increases this year. AMC has dropped 7% in viewers, but gained 15% in women 18-34 and 5% in women 18-49. The CBS soaps all have plunged 25% or more among women 18-34 this season, and with the exception of As the World Turns, nearly 20% among women 18-49. The ABC and NBC soaps fare better among younger people, although General Hospital has lost 23% this year compared to last.

As a result, network license fees have declined, causing executives to find ways to cut soap fat.

“We take a look at every aspect of our productions to see how we can maintain the quality but produce for less,” says Mary Alice Dwyer-Dobbin, executive-in-charge of production at Procter & Gamble Productions, which produces As the World Turns and Guiding Light for CBS. “That may mean using fewer sets or decreasing the size of our casts. Also, that means, when contracts come up for renegotiation, we have to be very cautious.”

At Sony Pictures Television, which distributes Days to NBC and co-produces Young and the Restless for CBS, executives have been streamlining costs for the last year.

“We've worked very closely with producers of the shows to do everything we can to operate these things as efficiently as possible in today's world,” says Steve Mosko, president of Sony Pictures Television.

“We took a look at how the shows were operating from top to bottom,” adds Steve Kent, Sony's senior executive vice president of international television production.

Behind the scenes, Sony has done everything from adding a computerized accounting system that allows the shows to track costs. A subtle saving: It got rid of expensive cue cards from the Young and the Restless.

“This is probably the healthiest thing we could have done for these shows,” Kent says.

Although ratings have plunged, soap operas still make plenty of money. Last year, soaps brought ABC, CBS and NBC some $2 billion combined in advertising revenue.

“At the end of the day, soaps are an incredible business,” Shapiro-Mathes says. “It may not be as good a business as it was before, but I'd argue that you could say that about anything on the networks.”