Crown Media: Hallmark Channel In Pink

The Hallmark Channel's parent said Wednesday the network posted nearly $100 million in upfront commitments this summer, while adding 19 new clients to its roster of pre-season purchasers. CPM increases were up 10% to 16% versus the summer of 2006.

New advertisers include Paramount Pictures and Wal-Mart, as well as Pizza Hut and Long John Silver's, both part of Yum brands.

Some 50% of the coming season's inventory was sold in the upfront, as the network looks to benefit from continued strength in the scatter market in selling the other half.

For the recently completed second quarter, Crown Media, which significantly narrowed its net loss, posted a 13% jump in ad dollars to $49.3 million, as subscribers increased by the same percentage to some 83 million.

Overall, revenue grew 11% to $55.9 million. The company's stock price, which has recently been trending down, shot back up some 11% to the $7 range in midday trading.

Particularly helpful to the company's fortunes was a renewed carriage deal with EchoStar in which the channel added some 5 million Dish Network homes. The deal also boosted the distribution of sister network the Hallmark Movie Channel by 4 million among Dish homes. Separately, Crown said it will launch an HD simulcast version of HMC early next year.

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Crown faces potentially difficult renegotiations with several large distributors, including Time Warner Cable, as deals expire into next year.

The company is hoping to distinguish itself as a hub for "family-friendly programming" as a way to persuade distributors to cut deals on more favorable terms. The tactic is aimed at appealing to cable operators that may be looking to ward off congressional and FCC frustration with what they believe is an overabundance of programming with violent themes.

Carving out that "wholesome" niche is also a way to appeal to advertisers. CEO Henry Schleiff said on a conference call to discuss 2Q results that Hallmark Channel's movies--which included five originals in the quarter--"may be predictable" and "sell a lot of Kleenex ... but our viewers love them."

New advertisers that signed up in 2Q include Visa and Tyson Foods.

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