ABC Serves Up Soaps

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New York -- After ditching plans for an all-news channel
and a kids network, Disney/ABC Cable Networks said last week it now plans to create a
24-hour cable soap-opera channel that will rerun ABC daytime dramas.

Because the cable network would show the soaps in
primetime, only hours after their daytime broadcasts, Disney/ABC Cable's plans are
expected to exacerbate tensions between ABC and its TV-station affiliates over the
hot-button issue of program exclusivity.

The all-soaps channel would reportedly mark the first time
a Big Four network would rerun entertainment shows on cable the same day they air on
broadcast.

But perhaps more important than affiliate reaction, it
remains to be seen how receptive cable operators and direct-broadcast satellite providers
will be to carrying the soap-opera channel.

It is slated to launch in mid-January next year, just weeks
after Geraldine Laybourne's female-targeted Oxygen is scheduled to debut. The two
networks, both attractive to women viewers, will be vying against each other for channel
space.

Disney/ABC Cable has had preliminary talks with MSOs,
including Time Warner Cable and AT&T Broadband & Internet Services (formerly
Tele-Communications Inc.), both of which tested the soap opera channel. But Disney/ABC
Cable doesn't have any signed carriage deals yet, officials said.

Based on test results in three markets last year,
Disney/ABC decided to go forward with the network.

The new service will air a combination of four time-shifted
ABC daytime soaps -- General Hospital, All My Children, One Life to Live and
Port Charles – in primetime, with some original programming and classic
primetime soaps filling the rest of its schedule.

The new network, which will sell advertising once it hits a
critical mass in distribution, will fall under the purview of Anne Sweeney, president of
Disney/ABC Cable, a unit of The Walt Disney Co.

Sweeney said it hasn't been determined if she'll
run the soap opera channel herself or if another executive will be hired to manage its
day-to-day operations.

ABC/Disney Cable will be seeking analog and digital
carriage for the all-soaps channel, she added. She declined to comment on whether the
channel would offer cash-launch incentives.

Disney/ABC Cable has the advantage of being able to package
the soap opera channel with some of its other cable properties. Disney owns Disney Channel
and the spinoff Toon Disney, in addition to ESPN, ESPN2 and ESPN Classics. Disney also
holds stakes in Lifetime Television, the digital Lifetime Movie Network, A&E Network
and The History Channel, with their digital offerings The Biography Channel and History
Channel International.

Oxygen, as a standalone network, won't have that kind
of leverage.

At least one cable operator expressed reservations about
the proposed all-soaps channel, especially with capacity so tight

"Isn't this what videotape is for?" asked
John Murawski, director of product management for the Lenfest Group. "I don't
see it adding much value to digital. Most people tape their soaps."

But an AT&T spokeswoman said, "We're
definitely interested in the concept. We had been testing it in Chicago. We look forward
to seeing the value this service may bring to our customers."

The soap-opera-channel concept has been kicking around for
years. Back in 1996, ABC was talking to Comcast Corp. about airing reruns of its soap
operas on Q2, which the MSO owned. But that plan never went forward.

In the meantime, Disney has weighed, and abandoned, several
proposed cable networks. In May 1996, Disney scrapped its announced plans to launch an
all-news network, because it was too pricey. And Disney later decided not to do a proposed
kids channel aimed at preschoolers.

But Disney did go forward with Toon Disney, a 24-hour
animation channel that debuted last year.

Sweeney said last week that soap-opera fans are a
"loyal and passionate group of viewers" who will respond to the channel.

"It's a big move for ABC Inc. to take," she
added. "But it's incredibly responsive to the consumer. I have all the reason to
think it will be a success."

Veteran media analyst Hal Vogel said a soap opera channel
makes more economic sense for Disney than an all-news channel did.

"They have the soaps already in production, so it
won't be a high step up in cost to do a soap channel, compared to an all-news
operation," Vogel said.

Last year, ABC began a test of its soaps channel, using the
name "All My Soaps," in part to allay station-affiliate fears that rerunning the
daytime dramas would cannibalize their audience on broadcast.

A test in Charlotte, where the soap operas were aired a
week after they were first telecast, was shut down Oct. 4 because it stirred little viewer
interest. But tests in Houston and Chicago – where the soaps were rebroadcast in
primetime the same day they aired in the afternoon -- found "incremental
viewing" patterns.

Some sources said ABC's plans will continue to
fracture its relationship with its TV-station affiliates. The stations are upset about the
re-airing of ABC's exclusive programming.

Still, ABC tried to get its stations' affiliate board to
agree to take a stake in the all-soaps channel as part of negotiations over compensation
to the network for its expensive National Football League contract for Monday Night
Football
and other issues. The affiliate board balked, so ABC now is making that offer
directly to stations.

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