Hallmark Breaks Into Cable's Upper Tier

Hallmark Channel chugs into the new year with new momentum, more investment in programming and an increased pace of advertising sales.

Hallmark caught fire in 2003 - in ratings, distribution and the ringing of the cash register at the ad sales department. That's no mean feat for a network that wasn't much of anywhere in ad-supported cable when it was rebranded from Odyssey in 2001. Those under-performing days seem to be a thing of the past, however, particularly on the strength of its holiday-related programming that boosted its fortunes near the end of the year.

The network had a banner year in ratings in December, ranking among the top 10 ad-supported cable networks in total household day with a 0.6 HH rating, according to Nielsen Media Research. Hallmark was 13th in total day and first in year-to-year total day growth for household impressions, among other milestones. Distribution has also grown by leaps and bounds, finishing the year with more than 56 million subscribers domestically and more than 110 million total internationally. With the addition of Comcast, Hallmark has long-term affiliation deals with every major MSO and satellite provider.

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Bill Abbott, executive vice president of national advertising at the network, knows that a lot of channels would kill to be associated with a brand like Hallmark.

"It starts with the brand, and the network really is so fortunate that we have such a strong brand," Abbott says in a recent interview. He said that it's a difficult environment to launch a cable network but that Hallmark Channel is fortunate to have an association with a long-established brand on television and in retail stores.

"That has propelled us to success," Abbott says.

At the end of the third quarter, the most recent data available, Crown Media 's ad revenues were $20.8 million, up 15 percent from the same point a year ago. For nine months ending Sept. 30, 2003, ad revenues rose to $66.8 million, an increase of 30 percent from the same period in 2002. Much of that is advertising on Hallmark's U.S. channel.

Hallmark pre-sold a majority of its advertising inventory in the upfront, and boosted ad revenues 92 percent compared to the 2002-03 upfront. The advertising community, attracted by Hallmark's strong performance in adults 25-54, also liked its distribution. The network was able to outperform its internal goals, which were to sell 100 clients and commitments for between $50 million and $55 million. It came out of the upfront with 110 clients and almost $58 million.

Its client roster is now more than 350 advertisers, Abbott said.

The network's programming has continued to grow, with the third-quarter acquisition of "MASH" and "Matlock." That has been joined by at least one original movie every month, more during the holidays, and there's talk of having as many as 23 original made-for-TV films broadcast on the Hallmark Channel in 2004. It has also acquired "JAG" beginning in 2005.

"We're continuing to stay true to the core philosophy of building original product, the tent pole of what the network signifies and stands for, along with the acquisitions of high quality and more original movies," Abbott said.

Also on deck for the future is the addition of an original dramatic series, something that Hallmark executives have said publicly is in their long-term plans. This past September, Hallmark began a second season of "Adoption," a reality-based series hosted by Jane Seymour.

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