Hallmark Q4 Ad Prices Increase; Writers Strike May Help Ratings

Nov 8, 2007  •  Post A Comment

Hallmark Channel said some of its fourth-quarter ad prices are up as much as 75% and that the writers strike could send viewers its way.
Henry Schleiff, CEO of Hallmark Channel parent Crown Media, told analysts on the company’s third-quarter conference call that Hallmark’s fourth-quarter scatter sales are 50% ahead of last year’s pace, thanks to added distribution, solid ratings and higher prices. After an 11% gain in prices on a cost-per-thousand (CPM) viewers basis in this year’s upfront, scatter pricing was as much as 75% above that, he said.
Those ratings could be helped by the writers strike, which began this week.
“The disruption at the broadcast level provides a bit of an opportunity at the cable level,” Mr. Schleiff said in response to a question.
He said much of the broadcast audience are people age 40 and above, and when those people can’t watch their favorite broadcast shows, they’ll still watch TV, rather than move to the Internet or other alternatives.
“That is our audience,” he said. “We among other networks will see some benefit in those ratings.”
Mr. Schleiff said the strike will have little effect on Hallmark’s programming well into 2008, as a record number of original movies have already been produced for the network.
“We have well anticipated our upcoming programming needs,” he said.
For the third quarter, Crown narrowed its loss to $37.9 million, or 36 cents a share, from $84.3 million, or 80 cents a share, a year ago.
Revenues increased 17% to $55.3 million, thanks to a 19% increase in advertising revenue and a 23% increase in subscriber revenue.
Mr. Schleiff said fourth-quarter CPMs are up a record 75% above upfront levels. He said the company had held back inventory in the upfront, giving it more spots to sell in scatter.
That has resulted in 50% more revenue being booked to date in the fourth quarter. Some of that is coming from new ad clients in the marketing and financial services categories, but demand is also coming from packaged goods marketers and pharmaceutical companies.
Mr. Schleiff also said Hallmark Movie Channel has added 20 new advertisers.

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