• by Paul Gough , May 9, 2003

The Hallmark Channel is expanding to scripted and unscripted series to air as early as the beginning of 2004.

David J. Evans, president/CEO of Hallmark Channel's parent company Crown Media Holdings, said that the channel's current focus is on both acquired series and miniseries and its original movie-a-month format. But he said that Hallmark Channel is just starting to develop original series that could air by this time next year.

Hallmark Channel is distributed to more than 51 million homes nationwide, a sharp increase since Crown Media purchased the Nostalgia Channel and rebranded it in 2001. It features a range of old network shows - from 1950s and 1960s staples like Bonanza and The Rifleman to 1970s and 1980s fare like Hawaii Five O and Quincy - to original movies and reruns of classic miniseries like The Thorn Birds. It has dabbled in series in the past, judging a series on adoption as a success but find less success with a Paramount series, Life Moments.

The channel continued to grow from October 2002 to March 2003, with a 67% increase in total day household ratings and a 70% jump in audience delivery in the first quarter compared to the same period a year ago. Its highest total day performance was notched March 31 with a nine-hour movie marathon that averaged a 1.2. An original movie, Love Comes Softly, delivered a 2.7 rating in its April 7 premiere to make it The Hallmark Channel's highest-rated show ever.

Evans said the movie-a-month strategy was working well, as was new programming blocks during the day and evening on Saturday and Sunday. Saturday's themed programming of Westerns have delivered a 0.9 rating and one show, The Rifleman, averages a 1.0 on Saturday afternoon. Hallmark has also started a Sunday mystery block with Hawaii Five-O, Quincy, Kojak and McCloud. Ratings average between 0.8 and 1.0 with Hawaii Five-O doing a 1.0 in its Hallmark airings. Evans said Quincy has been doing well in that block and also helped plug a hole in the weekday slot at 11 p.m.

The Hallmark Channel has also built a Friday night franchise around recent Disneyy movies, which it acquired recently and has averaged between 0.9 and 1.2. These movies include Flubber and Jungle2Jungle, and is part of Hallmark's strategy to appeal to a younger demographic of under-50s. But Evans said the network was still trying to program to its core demographic as well "so we don't lose our existing audience while skewing younger."

Taking advantage of its affliliation with Hallmark, the channel is running Mother's and Father's Day promotions with Gold Crown stores, affiliates and MSOs. Evans said the previous promotions around the holidays and Valentine's Day were successful and said that the channel was close to inking a deal for another cross-platform promotion between Thanksgiving and New Year's. "This year it will be bigger than ever with seven weeks of original and major events headlining the promotion," Evans said.

As for advertising, revenues increased 53% to $22.4 million in Q1, the bulk of it being domestically. CFO William J. Aliber said the higher revenues were a function of being able to charge higher CPMs based on increased distribution, delivery in the demographics and higher ratings. He said the Q1 saw the addition of 30 new advertisers and the channel received CPM increases of about 10%-25% higher than last year's upfront with only about 2% of options being exercised. So far in Q2 Hallmark Channel has added 26 new advertisers and seen about the same type of CPM increases with a dip to 1% in options exercised.

Executives are targeting CPM increases of between 10%-25% during the upfront, which they said would begin around the end of May and last about six weeks. The Hallmark Channel's goal is to sell between 60% and 65% of its inventory. "We will still hold back inventory in anticipation of increasing ratings and increased distribution and a forward-looking perspective on scatter markets," Aliber said.

In other news, Hallmark plans to add MASH to its programming lineup in September and plans a 12-hour marathon for early 1980s miniseries Shogun, which will air shortly. Evans said the channel will soon announce the acquisition of a "very strong off-network series" that remains on air in its eighth or ninth season but he declined to name it. "It's an excellent acquisition at an excellent price," Evans said.