Soap operas, "soaps" or "my stories," as many a grandmother has called them, are dramas presented in a serial format on daytime television or radio. Their name comes from a time when old serial dramas broadcast on radio had soap manufacturers (Procter & Gamble and Lever Brothers, to name a couple) as sponsors and/or producers. They also, you probably remember, looked really really crappy.
There are two main reasons for this lack of visual quality, both of which were rooted in the problem of soap operas' time slots and scheduling. Daytime TV shows generally don't pull in as much advertising revenue as evening programs, and many soap operas air daily instead of weekly, so low budgets, short production times and quick turnaround are the name of the game.
The Lighting Game
Soap opera lighting is a major reason the shows look the way they do.
Backlighting, part of the three-point lighting setup often used in television production, helps "lift" actors out of the background. This is especially useful for productions that are shot on a lower-quality medium and in small interior sets, which soaps often are. The problem is that shooting on videotape on a small set can reduce the subtlety of the lighting technique. Actors in the foreground often wind up very noticeably backlit, something that doesn't happen on shows with larger sets, or shows that are recorded on film.
Soaps and other lower-budget shows also look "off" because they're often evenly lit across the entire set to facilitate simultaneously shooting with more than one camera. This lighting/shooting method means the actors can move around and the lights don't have to be reset for every shot. This allows for fewer takes and costs less, but it also means more diffuse, less natural-looking lighting in the final product.
The filming medium (that is, what the show is recorded on) and the way the show is shot make up the the other half of the equation. Soaps have often been shot on various types of videotape to keep costs down, and compared to prime time shows and big budget movies shot on film, they can look a little flat. Shooting with videotape also gives you a lower resolution, and to compensate, soaps have always made heavy use of close-ups.
Time and budgetary constraints and the multi-camera setup also require soaps to edit differently than prime time shows. Soaps usually use static cameras, since dollies would mean more opportunities for mistakes, more takes, and more cost. Angle shifts are usually accomplished by cutting from one camera to another and any movement tends to be simple zooming, which you're about as likely to see in a movie as you are to see sweeping pan shots and long-take tracking shots on daytime TV.
Of course, daytime soaps have taken a big hit in recent years, and only four of the classics—The Young and the Restless, The Bold and the Beautiful, General Hospital and Days of Our Lives—remain on air. They all made the switch to broadcast in high definition, which was a costly upgrade, but one that greatly improved viewability. For a couple of years, All My Children and One Life to Live briefly found new life on Hulu, where they were also filmed and streamed in high definition. But old habits die hard, and the term "soap opera effect" still persists as a way to describe the glossy, overly polished look that shows or TV settings can take.