Hallmark Channel has pretty much existed under the radar since launching four years ago.
   But that is starting to change as the former faith-based Odyssey channel has grown with little fanfare into a mid-tier cable network with significant ratings growth that suggests it is approaching top-tier status. It has already become a viable competitor to networks like Lifetime that primarily target women with a slew of original movies.
   And provided Hallmark fixes its biggest problem--having the oldest viewers on cable television, outside some of the news networks--media buyers say it also stands a good chance of landing on more media buys.
   Like several other networks, Hallmark Channel is working to lower its viewers’ median age by rolling out original movies that will bring in new viewers.
   David Kenin, the network’s executive vice president of programming, says the age issue is being addressed and being discussed with media buyers in preparation for the upcoming $6.6 billion upfront ad-selling season.
   “It’s important for us to down age the network, but not quickly because that would be disastrous,” he says.
   “We recognize that evolution is a basic part of our business. That seems to be happening fairly effortlessly. But we know that as we produce more original programming we’ll be seeking stars who will attract a younger audience. And we often do casting with a younger star and an older star in the same movie.”
   Original movies are also largely behind dramatically improved ratings.
   For instance, the network generated its largest weekly audience earlier this month on the strength of Ed Asner in “Out of the Woods,” a movie that attracted 3.4 million viewers, becoming Hallmark’s second most watched original.
  “Our growth in ratings has been meteoric in the last three years, starting from a very low base,” says Kenin. He attributes that in part to the media picking up on its programs.
   “We’ve also had tremendous growth in our press coverage because we’ve had something to talk about, which is the original movies and because we went into a new genre with mysteries.”


The network's identity
     Although Hallmark Channel has largely ditched the religious programming of Odyssey, it sticks close to inoffensive movies and miniseries that are meant to get families gathering around the TV set.
   The network is owned by Crown Media, a division of Hallmark Cards, so its programs have mostly revolved around the holidays. That is starting to change as Hallmark Channel eases into programs like its “Mystery Movie” series, which kicks off a second season this summer.
   “The brand is the driver here; it’s the most important aspect of the channel,” says Bill Abbot, executive vice president of advertising sales at Hallmark Channel.
   “The Hallmark Hall of Fame for 50-plus years has been a talent-laden, award-winning showcase of movies on CBS. A lot of the reputation of the channel stems from the Hallmark Hall of Fame brand. Viewers know they will receive quality programming in an environment that is not objectionable.”


The network's target audience
    Hallmark Channel is trying to reach families and specifically adults 25-54. But it has its work cut out for it in that area. The median age of its viewers is 58 years old, which is about 10 years older than viewers watching Lifetime and similar networks.
   “We have down aged three or four years over the past three or four months,” says Abbot. “Certainly our goal is to become younger but at the same time we don’t want to alienate what has become a large core audience in an effort to become 18-34. We’re not going to go down that road.”


The network's ratings
     Hallmark Channel is neither the fastest growing network nor a top-10 rated network.
   But it has serious momentum. Ranking in the top 30 in its core 25-54 demographic in first quarter, the network’s primetime audience was up 23 percent from a year earlier, to an average 284,000 viewers.
   On a total-day basis, Hallmark Channel is doing even better. Its 25-54 audience was up 53 percent, while its overall audience was up 45 percent.
   “They’ve hit their stride,” says Shari Anne Brill, vice president and director of programming at Carat. “Just like you’re seeing networks like National Geographic and FX go through evolutions, it’s almost like you need five years to get a network to where you want it to be.”


The network's competitive set
     Hallmark Channel essentially competes with all general-interest networks that do well with older adults, particularly women.
   But it has quietly joined a handful of networks like Lifetime, Lifetime Movie Network, and, to a lesser degree, WE: Women’s Entertainment, that target women with a lineup heavy on movies.
   What distinguishes Hallmark from its competitors is its strict adherence to programs that while not necessarily religious aren’t going to turn off people who are.


What’s new for 2005/06
      Hallmark Channel is rolling out more than two dozen original movies and miniseries this year, including 14 this summer.
  These includes new episodes of “Mystery Movie,” which has John Larroquette playing an attorney in “McBride,” “Life Goes On’s” Kellie Martin as an amateur detective in “Mystery Woman,” and “Caroline in the City’s” Lea Thompson as a mom caught up in solving crimes in “Jane Doe.”


The network's upfront outlook
     Hallmark’s message to media buyers is that it has momentum.
   Moreover, media buyers say the network has several unique opportunities for advertisers that aren’t going unnoticed. While most networks offer cross-platform deals where advertisers can advertise on a network and related media properties, Hallmark has 4,200 greeting card stores and a production company, Hallmark Entertainment, that can easily work advertisers into its programs or the title of movies.
   Hallmark’s Abbot says the network’s ad sales are booming in the scatter market, when ad time not sold in the upfront is booked.
   “Our first and second quarter scatter cost-per-thousands are up 30-plus percent and our revenue is up 45 percent in both quarters. Either we’re doing a great sales job or our network is starting to show up on [audience] rankers and has broken through because we’ve finally reached critical mass by delivering 70 million homes.”


The final prognosis
     On a scale of 1 to 5, with 5 being excellent: 3.
    Hallmark Channel has a lot going for it and it is certainly touting ratings growth, sizeable audiences for original movies like its “Mystery Movie” series, high brand recognition, and a slew of cross-platform advertising deals.
   But the high median age of its viewers remains a problem for advertisers targeting adults 18-49 and even those focusing on the 25-54 demographic.

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