Hallmark, Comcast Reach Multiyear Distribution Deal

Hallmark Channel and Hallmark Movie Channel, the major assets of Crown Media Holdings, have renewed a major distribution agreement with Comcast Corp., the biggest cable operator in the U.S.

Hallmark's parent, Crown Media, wouldn't disclose terms of the deal, except to say it's a multiyear pact. But it has been reported that Hallmark was looking for a substantial hike beyond the average fee of 3 cents to 4 cents a subscriber per month it charges cable operators--specifically because of its high-rating performance versus other cable networks that get higher monthly fee deals.

Henry Schleiff, president and CEO, Crown Media Holdings, Inc., would only say that "our ability to reach a mutually satisfactory agreement should indicate that regardless of size or other factors, parties who operate in good faith can reach fair agreements without outside help or intervention."

Schleiff had noted that Comcast's own cable network Golf Channel, E! Entertainment Television, as well as Time Warner's CNN and Court TV, get higher license fees but lower prime-time ratings than Hallmark.



In November, Hallmark Channel was ranked sixth in prime time with a 1.6 household rating, and ranked 10th among women 25-54 with a 0.5 rating among all ad-supported cable networks.

Schleiff had been publicly campaigning that Hallmark had not been dealt with correctly in negotiations with cable networks. He insists that it is an independent cable network operator with a smaller stable of channels than Time Warner, Viacom, etc. Schleiff even asked the Federal Communications Commission to investigate his claim.

For his part, Schleiff said the FCC had already started this process. The FCC study, however, focused more on whether the federal agency needed to adopt rules designed to foster greater cable carriage of unaffiliated programming. Wholesale pricing to cable operators was not part of that analysis.

As part of the agreement, Comcast will also carry an HD channel of the Hallmark Movie Channel to launch in March 2008.

Comcast is the first of many big re-negotiations deals for Hallmark. Two other contracts--Time Warner and DirecTV--are expiring in December.

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