• by David Goetzl  @dgoetzl, November 4, 2010

Helped by a near doubling at the Hallmark Movie Channel, which has experienced significant distribution gains, Crown Media posted a 4% increase in ad dollars in the third quarter.

Hallmark Movie Channel's ad revenue rose from $2.4 million to $4.6 million, driving a 4% increase for the company -- with flagship Hallmark Channel -- to $48.5 million. Ratings hurdles hurt, but higher CPMs helped, Crown said, as it reported earnings for the July-September period.

Hallmark Movie Channel is in 38.2 million homes, a 15 million rise over the past year.

The company said the Martha Stewart-inspired programming on the Hallmark Channel that started Sept. 13 is starting to bear fruit. "While ratings were initially below expectations, in the six weeks since airing, they are showing a positive trend with a steadily building audience," it stated.

"Our third quarter was marked by the implementation of some important strategic initiatives which will further strengthen our advertising revenue stream and appeal to distributors," noted Bill Abbott, president and CEO of Crown Media. He referred to the new lifestyle block as "the first step in a process of establishing several original series in daytime centered on home and celebrations that appeal to a loyal following of women 25-54."

Crown Media reported revenue of $62.5 million for the third quarter of 2010, a less than 1% decrease from $62.8 million for the third quarter of 2009.

Subscriber fees in the third quarter were down 13%, partly due to a carriage dispute with AT&T U-verse. Overall, Crown had a slight revenue decrease of less than 1% to $62.5 million.

Shareholders sent the shares down about 4% to the $2.81 range on Thursday. At one point during the quarter, it was nearly $1 higher on an optimistic report by an investing columnist.